Bond yields and stock prices, commodity prices and real estate
Maybe we are just in one of those near term cyclical retraces as we were at this almost exact time last year that will last until September like, as I said, last year. Profits were not hard to find in the first quarter of this year and they are, for long investors, almost impossible to find in any market this quarter.
The month of May has been pushing some stocks off of whatever precipice they were on, and pushing bond investors to wonder how long this "rally" can continue. Looking at the yield curve is jaw dropping for anyone with a long term perspective. Thank goodness it still slants upward, but finding a yield above 1% in Treasuries requires well over a one year horizon and finding a yield of over 2% requires more than a 10 year security in the U.S. government market.
Whether this is sustainable or not is really not the issue. The issue is what this portends for our economy, and what kind of slingshot turnaround this sets the U.S bond market up for in an unexpected treat, sarcasm intended.
Now some basic stocks associated with rail transport, with steel and steel wire production, and with materials companies have been giving up lots of ground just in May. These are stocks that are associated with the strength of the economy broadly and the commitment of the government, or governments, to commit resources to rebuilding anything in this country.
Penn Station in Manhattan, the nexus of the Long Island Railroad, New Jersey Transit, and Amtrak's northeast corridor, has not had a functioning air conditioning system for the last two days in 85 to 87 degree heat. Tomorrow, maybe, this armpit of humanity may be cooled down. All markets are in decline or are suspect as being overpriced, and the infrastructure of the trading center of this country is breaking down.
Concerned mood tonight I guess as one wonders... it's too soon to buy into this downturn, almost certain about that, but is it too late to make some selling decisions into the few safe havens left like closed end preferred funds, Ginnie Mae funds, and U.S. large corporate dividend payers. Oops, just did a little of that today.
The month of May has been pushing some stocks off of whatever precipice they were on, and pushing bond investors to wonder how long this "rally" can continue. Looking at the yield curve is jaw dropping for anyone with a long term perspective. Thank goodness it still slants upward, but finding a yield above 1% in Treasuries requires well over a one year horizon and finding a yield of over 2% requires more than a 10 year security in the U.S. government market.
Whether this is sustainable or not is really not the issue. The issue is what this portends for our economy, and what kind of slingshot turnaround this sets the U.S bond market up for in an unexpected treat, sarcasm intended.
Now some basic stocks associated with rail transport, with steel and steel wire production, and with materials companies have been giving up lots of ground just in May. These are stocks that are associated with the strength of the economy broadly and the commitment of the government, or governments, to commit resources to rebuilding anything in this country.
Penn Station in Manhattan, the nexus of the Long Island Railroad, New Jersey Transit, and Amtrak's northeast corridor, has not had a functioning air conditioning system for the last two days in 85 to 87 degree heat. Tomorrow, maybe, this armpit of humanity may be cooled down. All markets are in decline or are suspect as being overpriced, and the infrastructure of the trading center of this country is breaking down.
Concerned mood tonight I guess as one wonders... it's too soon to buy into this downturn, almost certain about that, but is it too late to make some selling decisions into the few safe havens left like closed end preferred funds, Ginnie Mae funds, and U.S. large corporate dividend payers. Oops, just did a little of that today.
posted by John Borden at 10:58 PM
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