From the Desk of Ian Culley @IanCulley
“You can’t pay me enough to buy US Treasuries.”
That’s the message from the bond market.
The result: a persistent rise in interest rates.
Classic intermarket ratios – copper versus gold, regional banks $KRE versus REITs $IYR, and the Russell 2000 $IWM versus the S&P 500 $SPY – all point to lower yields.
This has been going on for months. Some may argue that these ratios are broken or no longer carry significant insight into the direction of rates.
It may be true that the strong relationship between the above ratios and interest rates has indeed decoupled.
But it’s not solely relative trends hinting at declining yields.
The stocks that benefit the most from a rising rate environment also look terrible on absolute terms…