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2013: S&P 500 +28%, US Treasury Curve Unchanged

Tyler Durden's picture


While both stock and bond markets are "influenced" by the ongoing flood of central bank liquidity, it is clear that the two "markets" have a very different view of the future. The last few days have seen the longer-term bond term structure (perhaps indicative of future growth hopes) collapse and are now unchanged on the year. Of course, the "taper" has been seen as nothing but great news by stocks which have pushed on to a 28% gain on the year... Which "efficient" market is discounting the future correctly we wonder?



Chart: Bloomberg


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Tue, 12/24/2013 - 12:35 | Link to Comment Save_America1st
Save_America1st's picture

keep an eye out on that 10's up to 2.98% today and rising...

Tue, 12/24/2013 - 12:36 | Link to Comment idea_hamster
idea_hamster's picture

"US Treasury Curve Unchanged"

You misspelled "unhinged" -- darn that autocowrecked!

Tue, 12/24/2013 - 12:43 | Link to Comment Boston
Boston's picture

I am.....and I'm buying it.

The Fed just cannot let the 10yr rise too much more. And since it's successfully suppressed rates for many years now....and pumped up equity prices at the same's hard to believe that---if forced to choose---the Fed would 'sacrifice' the Treasury market to save the equity markets. 

Call me crazy, but things would get a lot 'worse' if rates blew out, as compared to an equity sell-off.


Tue, 12/24/2013 - 13:09 | Link to Comment ZH Snob
ZH Snob's picture

by their respective natures they are both headed to oblivion.

Tue, 12/24/2013 - 12:37 | Link to Comment HUGE_Gamma
HUGE_Gamma's picture

the public demands a BONUS CHART?!?! at the close with TWTR

Tue, 12/24/2013 - 16:59 | Link to Comment Emergency Ward
Emergency Ward's picture

Any kind of chart as long as it's a Hockey Stick.

Tue, 12/24/2013 - 12:36 | Link to Comment Obchelli
Obchelli's picture

IF it breaks 2.98 it may breakout if not it's exactly at double top. Will be interesting to see what happens over 3%... Now they watch they will move magic number when all hell breaks loose to 3.25

Tue, 12/24/2013 - 12:51 | Link to Comment Save_America1st
Save_America1st's picture

yeah, and let's just see how long Larry Yellen can "taper" as these rates continue to rise.  She'll be CTRL-Peeing all over herself in no time after the first of the year.  Soon it will become 100 Billion/month and up and up and up...anything to keep the rates down and equities pumping, right? 

And remember...there is no debt ceiling anymore.  To the moon!!!

stack phyzz Ag/Au and sleep well at night.  Long lead projectiles and lead projectile delivery systems ;-)

Merry Christmas to all ZH'ers!!! 

Tue, 12/24/2013 - 13:08 | Link to Comment markar
markar's picture

 "Will be interesting to see what happens over 3%."


DB(Death Bed) will be the first to explode from their interest rate swaps

Tue, 12/24/2013 - 12:49 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

<Book'em (those profits) Dano.>

Tue, 12/24/2013 - 13:13 | Link to Comment nickels
nickels's picture

Looking for a broken elevator cable at the first of the year. Only a limited number of hotshots can get out at the top. Who's going to take the money and run in the new tax year?

Tue, 12/24/2013 - 12:52 | Link to Comment Yen Cross
Yen Cross's picture

    It should be interesting to see if the usd continues to strengthen with higher yields, or if it sells off when the equity markets start to choke on higher funding costs. Based on the recent rate gains in bonds and the slight weaking bias of the usd my guess is a weaker dollar, unless all hell breaks loose.

    The usd/jpy carry is having trouble with any additional gains, which also doesn't bode well when you consider the rate spike and the recent blast up in equities.

Tue, 12/24/2013 - 15:48 | Link to Comment disabledvet
disabledvet's picture

should be interesting to see what happens when instead of going up everything goes down.

Tue, 12/24/2013 - 12:59 | Link to Comment wisehiney
wisehiney's picture

Don't worry, it's is a "good" deflation.

Tue, 12/24/2013 - 12:57 | Link to Comment Save_America1st
Save_America1st's picture

I just spotted 2.99 for a minute there and then back to back to 2.99 as I type this...

Tue, 12/24/2013 - 13:08 | Link to Comment wisehiney
wisehiney's picture

Hold, Hold, Hold, HOLD................

Tue, 12/24/2013 - 13:46 | Link to Comment wisehiney
wisehiney's picture

S&P 500 dividend yield = 1.88%

Ten year 3%


Tue, 12/24/2013 - 14:11 | Link to Comment derek_vineyard
derek_vineyard's picture

dividends taxed as capital gains interest as ordinary income.  come on stocks NOW!

Tue, 12/24/2013 - 16:57 | Link to Comment PrecipiceWatching
PrecipiceWatching's picture


I don't get it.  At all.

Someone smarter than I will have to explain to me why anyone would want to even consider buying the debt of the most flat broke government in history.


At some point, somebody is not going to get paid.

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