10Y Treasury Crosses Gundlach's "Red-Line": Will Stocks "Start To Suffer"?

10Y US Treasury yields just jerked higher, breaking above the crucial 2.63% level - the highest yield since Dec 2016.

10Y is up almost 30bps since the Dec 13th Fed rate hike...

https://www.zerohedge.com/sites/default/files/inline-images/20180118_10Y.png

As we detailed previously, during the Q&A segment of DoubleLine's Jeffrey Gundlach's most recent presentation, the bond guru was asked an interesting question, regarding what yield on the 10Y would be high enough to finally pressure stocks into selling off.

For Gundlach the answer came with two significant digits of precision: "if the 10 Year goes to 2.63% stocks will be negative impacted."

However, he also added that if the 10Y TSY passes 2.63%, it will head well higher, likely pushing toward 3%, and since he expects a 3.25% print on the 10Y in 2018, it is clear why Gundlach is not too keen on stocks.

It's a little early to say but we do note that bonds and stocks are falling together...

 

https://www.zerohedge.com/sites/default/files/inline-images/20180118_10Y2_0.png

2.6394% is the high yield from Dec 2016 and so we are within a few ticks of the highest yield since September 2014...

https://www.zerohedge.com/sites/default/files/inline-images/20180118_10Y1.png

Comments

natxlaw Thu, 01/18/2018 - 22:00 Permalink

Just a thought, what if the bond market carnage never takes out the U.S. stock market? What if the worthless Fed bucks from QE Infinity make a mad dash to the stock market and push the Dow to 50K, 100K, 500K. 

China and Russia have had it with the petro-dollar, and everyone knows it. We can't even force Venezuela to use dollars. The companies are rushing back to the U.S. from China, so apparently labor is going to be getting pretty cheap.

They have to run this scam a little differently every time, just to make sure those with historical perspective still get short sheeted, and a bond market meltdown with blow off stock market would achieve that. Lindsey Williams even alluded to this possible end game.