iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,431 Blog Posts

A Huge Rally is Underway, in Risk Off Assets

The Dow is higher by 125 and the gorillas are very active this morning, throwing feces at one another. Taking a look under the hood of today’s action, the biggest winners are found in high yielding stocks and bonds–namely REITs, utilities, long dated treasuries, even gold.

How does that make sense with the dollar higher by 0.2%?

Buying financials because you think rates are going up is utterly retarded, if in fact the spread of the yield curve is tightening. That’s exactly what has been transpiring, with spread now just 76 bps between the 2-10yr.

curve

REITs highlight today’s winners in financials.

REITs

The ark floats, asshole.

tlt

Even overvalued utilities go higher in a negative interest rate world of wonder.

utes

Granted, plenty of other stuff is going higher with these risk off assets. But, it bemuses me to see these assets elevated in price after months of relentless rallies in stocks. The death of the bond trade has been predicted far and wide, for years, and all to no avail. Maybe, just maybe, it is the desired outcome for cash strapped, debt laden, governments to see their borrowing costs as cheap as possible–maybe even profitable via negative rates. After all, don’t you shop for the lowest possible rate when taking out a mortgage or a line of credit?

If you enjoy the content at iBankCoin, please follow us on Twitter

5 comments

  1. matt_bear

    take ’em out for Harambe!

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  2. J Adabese (your pen pal)
    J Adabese (your pen pal)

    I wonder if we’ll ever get the opportunity to obtain a negative interest rate mortgage?

    • 0
    • 0
    • 0 Deem this to be "Fake News"