The Bond Markets - The Heat Is On!
Our historic low yields, and the effects of them, are one of the major reasons that our equity markets are rising.
The 2 year, three year, five year, seven year, and 10 year Treasuries are either at record lows or just off them.
The heat is on, on the street
Inside your head, on every beat
And the beat's so loud, deep inside
The pressure's high, just to stay alive
Cause the heat is on
For any industry, such as insurance companies, or individuals, such as retirees, "The Heat is On." There is almost nowhere on the planet to get decent yields to either support your business or your lifestyle. The 2 year, three year, five year, seven year, and 10 year Treasuries are either at record lows or just off them. While there is the usual blather in the Press about the equity indexes, the rise in bond prices and hence the lowered yields, are barely mentioned.
Our historic low yields, and the effects of them, in my opinion, are one of the major reasons, if not the absolute reason, that our equity markets are rising. This is because, as bonds mature and run-off, that money is going into the stock markets on a hope and a prayer that appreciation will set-off the cash flows and our historically low yields.
There are a number of key take-aways from this data. The low yields are certainly discernable, but I point to the compression that is taking place as the risk assets close in ...
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