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Bond Yields To Rise: The Switch Between Stocks And Bonds

Published Fri, 08 Nov 2019 12:00:04 -0500 on Seeking Alpha

The yield on the 10-year US Treasury note is approaching 2.00 percent.
This yield has not been that high since the end of July 2019.
Since then, the yield has hit a low of 1.47 percent in early September.
What’s going on?
Well, it seems as if foreign money is playing a big role in this movement.
In the summer and into the fall, I traced the decline in bond yields to foreign risk-averse money flowing into US financial markets and going into the US Treasury market.
Along with this flow, we saw the yield on US Treasury Inflation Protected securities (NYSEARCA: TIP) becoming negative. In late August, the yield on the 10-year TIPs fell to a negative 10 basis points.
We also saw a decline in US stock prices during this time.
Where the S&P 500 stock index hit a new historical high on July 26, stock prices weakened through the rest of the summer and into the fall months.
The statistics indicated that foreign monies that had gone into the US stock market were being transferred into the bond market.
So, not only were foreign funds flowing into the US bond market, they also seemed to be flowing into the stock market as well.
Still, during much of this time period the value of the US dollar in foreign exchange markets rose, indicating that foreign money was still coming into the US, but it just seemed to be going into the bond market. The US Dollar index reached 99.40; it’s near-term high on September 30. One could buy one Euro for only $1.09 on... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ISHARES BARCLAYS TIPS BOND FUND 115.82   0.0 0.00 2.15 1.85


Older articles featuring Ishares Barclays Tips Bond Fund (TIP):
Real Yields Are Rising, But Not Enough To Be Attractive
Stocks Will Lose Patience With Sharply Higher Yields If Bond Bloodbath Continues
When High Yield Isn't High: After-Tax ETF Returns
5-Year TIPS Auction Results In Surprisingly Low Yield
10-Year TIPS Reopening Gets Real Yield Of 0.174%, Lowest In 3 Years
New 10-Year TIPS Auctions With Lowest Real Yield Since 2016
Real Yield In 5-Year TIPS Auction Drops To 0.152%
VTIP: As Yields Sink, Consider Adding Inflation Protection
10-Year TIPS Reopening Generates A Real Yield Of 0.567%
Treasury Yields: Waiting On The Next Catalyst