Some Think Strong Bond Market Signals Bear for Stocks

By on August 11, 2010

Jeff Cox, staff writer, reports that a strong bond market could be seen as a bad omen for stocks:

Since hitting its most recent high yield of 4.01 percent on April 5, the 10-year Treasury bond has slid more than 1.20 percentage points, a metric that signaled in 1990, 2000 and 2007 that a steep drop in stocks was only two months away, according to research from Gluskin Sheff strategist David Rosenberg.

With the 10-year yield at 2.79 percent in Tuesday trading and the bond market still red-hot despite continued predictions of its demise, the big bear indicator is looming large.

The article continues with the thought that perhaps bond market investors are more savvy than equity investors.

Source: CNBC

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