Friday, 12 October 2018 08:48

Bonds are Rallying, so Why are Stocks Falling?

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(New York)

Something very odd happened in markets yesterday—the reaction to a stimulus had gotten so bad, that it reversed the original stimulus. We are of course referring to the fact that the stock sell-off, itself seemingly a response to the rise in bond yields recently, became so bad yesterday, that bond yields finally turned around and moved lower. In other words, bonds scared stocks so much that bonds themselves got scared. The stock market has fallen more than 5% in two days.


FINSUM: This was an interesting, albeit easy to forecast, move. It makes one wonder, which is the cart and which is the horse?

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