Treasury Yields Spike Into 'Danger Zone' For Stocks

10Y Treasury yields are back above 2.90% - the highest since spiking on Powell hawkish comments  - and back into what some have called the 'danger zone' for stocks...


Last month's payrolls print (blue rectangle) prompted a spike in yields which sparked a drop in stocks and the collapse of XIV and the short-vol trade...

This time is different... for now.


BullyBearish Racer Fri, 03/09/2018 - 11:23 Permalink

of course...get everyone excited and distracted with a "jobs" report, pump up equities and THEN, start raising the rates...if anyone notices say: it's because "the economy is SOOOO STRONG"...


but really:

If economy's so great (300K+ jobs created),why are Fed rates 1 1/2% - "emergency" level & Fed Balance sheet still $4.4T? Aren't they way behind curve (inflationary?).Why only 1/4 pt baby steps?Because it's all based on a big lie- unsustainable asset bubbles&massive malinvestments

In reply to by Racer

Fish Gone Bad BullyBearish Fri, 03/09/2018 - 11:28 Permalink

LIBOR continues to rise

 march 08 2018  1.73957 %

 march 07 2018  1.71794 %

 march 06 2018  1.71131 %

 march 05 2018  1.70170 %

 march 02 2018  1.69050 %

 march 01 2018  1.68620 %

 february 28 2018  1.67007 %

 february 27 2018  1.66418 %

 february 26 2018  1.64800 %

 february 23 2018  1.63120 %

 february 22 2018  1.62070 %

 february 21 2018  1.60251 %…

In reply to by BullyBearish

syzygysus Fri, 03/09/2018 - 11:01 Permalink

Kenny Loggins

Out along the edges
Always where I burn to be
The further on the edge
The hotter the intensity

Highway to the Danger Zone
Gonna take it right into the Danger Zone
Highway to the Danger Zone
Ride into, the Danger Zone

RealistDuJour Fri, 03/09/2018 - 11:09 Permalink

In a vacuum, I suppose an investor would compare "yields" on two instruments.  But in a real world where there are brighter and brighter lights shining on the American economy, such as today's jobs, reports of softening war attitudes etc... there's a lot more an investor assesses.

What would be much more helpful than an arbitrary line in the sand is a chart that compares long term dividend yields and bond yields and overlay that on the stocks markets.  ZH is good at that... unless it squashes a narrative.  Don't worry, I just looked... lets just say you'll never see it posted onto ZH any time soon...

Yen Cross Fri, 03/09/2018 - 11:23 Permalink

   This is quite a conundrum that the banksters are finding themselves in.

  Equities get bought, bonds get sold, and visa versa. They want their cake, and to eat it to.

wmbz Fri, 03/09/2018 - 11:25 Permalink

"Danger zone for stocks"

Nonsense, there is no such thing. Stawks are bullet proof. This headline will be printed when the DOW is 30,000.

What's good for Banksters Inc. is all that matters...Ever!

Snaffew Snaffew Fri, 03/09/2018 - 12:13 Permalink

this is one cuckoo money grab right now...the FAANGS are exploding as if there is no there investment in the world better than stocks with minimal free cash flow and absurd p/e's.  Keep buying---they are all going to a million.  Perhaps AMZN will be the first 2 trillion dollar company.  Right now, it is valued at about $100 for every living human on the is about $110, msft $100, goog $60, FB-$60...these 5 american companies alone are worth $430 for every man, women and child on the planet.  That's about the annual income of a third of the globe.  When you strip out debt, are humans net worth even on par with just these 5 american companies?  Valuations are absurd---but the games go on.

In reply to by Snaffew

GotGalt Snaffew Fri, 03/09/2018 - 16:57 Permalink

Actually, FAANGS do have some great free cash flow.  They just keep plowing it back into the business though.  At least Amazon and Netflix do.  Apple, Facebook, Microsoft, Google all have great cash flow.


Frankly, the FAANGS are fine.  It's the rest of the Nasdaq that is littered with crappy companies that exist purely because Ameridumbs keep plowing their 401(k)s into generic Nasdaq ETF or Russell ETF.

In reply to by Snaffew

thegame007 Fri, 03/09/2018 - 12:08 Permalink

Holy shit....there is no fucking danger zone.   rates are at fucking 3%     Like 95th lowest percentile in last 50 years.    Fuck why do you guys listen to this fool.....9 years and still banging their head against the bull.   Following this dipshit has caused people to lose untold millions on the upside...smh