Stocks Mirror Bonds

Here’s an interesting chart. This shows the S&P 500 in black along with the long-term Treasury ETF (TLT). Viewed this way you can see that they’re almost perfect mirror images.

Yesterday, the 30-year closed at a yield of 4.61%. That’s the second-highest yield in over nine months while the S&P 500 closed at its highest level since June 25, 2008.

The message over the last few months is clear: stocks have been rising as bonds have been falling. As I wrote earlier, this is exactly what QE2 was supposed to do.

Posted by on February 2nd, 2011 at 11:47 am


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