Wednesday, June 4, 2008

Surprise: Both Stocks and Treasuries higher!

I am accustomed now to seeing treasuries and stocks move in opposite directions. Imagine my surprise today at seeing that both stock index and treasury futures are modestly higher. Good news on economic data today have pushed stocks higher, while recent interest rate moves above 4% have resulted in the buying of treasuries for yield, especially in light of renewed worries about the financial sector. Ironically, this has pushed yields lower again.