We’re at an odd crossroads here, with both the S&P 500 and U.S. Treasuries climbing at the same time. Typically, they hedge one another. In the past, when stocks traded down, bonds went up and vice versa. Now, the stock market is being jimmy rigged higher by a mega cap charge, which is also creating enough uncertainty to create demand for treasuries. The idea that Trump will get anything done, other than tear apart Obama’s legacy, isn’t something investors are counting on anymore. People are buying AMZN, NFLX, GOOGL, MSFT and AAPL because they think the ride will continue, regardless of an infrastructure bill or tax reform.
But is this a wise bet?
US Bonds yields are at 6 mo lows
I’m tempted to start buying zero coupons bonds to capture the beta in the bond market now, via ZROZ, but have abstained because, deep down, I do not believe the bond market has much upside. The market might take the month off for June, especially since the broader indices are overdue to digest their gains, which might lead to MOAR gains in GLD/TLT.
I’ll be making my adjustments in Exodus today, swapping out of my current cadre of stocks for a new set, likely adding to both GLD/TLT in the process.
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TLT may want to go fill the gap at the 128-129 level. Banks soft. Gold higher. USD Croaked. Perhaps Bonds discounting any near term future rate hikes?
Banks soft? Huh?
If I were into speculating in financial paper markets, I’d start buying zero coupons bonds to capture the beta in the bond market now, via ZROZ. It is a fact that the policy of open market purchases makes bond speculation risk-free. Speculators will forestall the central bank and front-run its bond-buying program. That’s guaranteed.
fuck treasuries , long NQ or die