I think this is an important discussion. Which way are rates headed?
Remember, Interest Rates setting up for a collapse was one of the reasons we were so bearish equities in late January, and looking to own bonds instead.
The thought process in January was the following: If 10s are going to break their 2012 & 2016 lows, is that most likely happening in an environment where stocks are doing well? Or are rates collapsing most likely taking place in an environment where stocks are under pressure?
Our bet was the latter. We used rates as a leading indicator.
Today we’re doing the same thing. But the data coming in is the exact opposite.
First of all, here are US rates going out last week at new 9-month highs: [Read more…]