Today I want to point to a chart that a really smart friend of mine has been sending me for months. He prefers to remain nameless, you know how these sell side guys roll, so we’ll just call him Mr. T. In this Chart, Mr. T has been telling me since the Fall that the Regional Banks vs REITs ratio is suggesting that U.S. Interest Rates are heading lower, specifically the U.S. 10-year yield.
On the top frame, we’re looking at the Regional Bank Index ETF $KRE over the REITs Index ETF $IYR. In this case, the numerator, Regional Banks, do relatively well when the market thinks rates will rise, while the denominator, REITs, do relatively well when the market thinks that rates [Read more…]