Treasury prices plunge (yields fly higher) following the big rally in Europe and the NFP report....

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Tschurin Comments (265)
 
According to FastTrack data, through yesterday's close TLT was up 8.53% YTD and SPY was up 9.91%. Hardly a difference worth getting one's knickers in a twist about.
3 Aug 2012, 12:22 PM Reply Like

SA Editor Stephen Alpher Comments (493)
 
At the moment, SPY +11.1% and TLT +4.8% YTD.

This doesn't include interest/dividends, but since SPY yields more than TLT, that would make the gap bigger!
3 Aug 2012, 12:24 PM Reply Like

867046 Comments (399)
 
Potential tradable events:

1) USAF and USN joint training exercise later this year i.e. potential Iranian interdiction: TLT++, SPY-

2) Market run up into Xmas, SPY+, TLT-

3) North Korea announces opening to west SPY+, TLT-

4) US election: TLT?, SPY?

5) Spike upwards in jobs numbers in Sep-Oct timeframe TLT-, SPY+

6) Housing continues to improve, TLT-, SPY+

Overall SPY bulls have more upside.
3 Aug 2012, 12:40 PM Reply Like

Tschurin Comments (265)
 
Dear Ed: didn't mean to cause offense. SA does a great job. I am just reporting the data; that which I cited includes interest, dividends and capital gains. My general point was to caution against extrapolating from half-a-day's market moves. As we all know, that can be undone just as quickly as it arrived.
3 Aug 2012, 12:40 PM Reply Like

untrusting investor Comments (9879)
 
T,
True, 1 or 2 day market moves usually are reversed in short order in these markets.
4 Aug 2012, 03:09 PM Reply Like

radicall Comments (534)
 
It just baffles me that with unemployment rising, consumer spending falling and europe in recession - stocks are nearing YTD highs.

I do take the editor's view on TLT into consideration, but people in Japan fought yields for a while too
3 Aug 2012, 12:44 PM Reply Like

American in Paris Comments (4698)
 
It baffles that you have such an one sided view of the data. Housing in recovery. Construction up 6% year over year. Durable goods production doing well on the back of autos and aircraft.

No wage pressures. US companies very lean and fit.
3 Aug 2012, 04:35 PM Reply Like

glssmrbl Comments (222)
 
So why are the autos (AAP, AZO, ORLY, F, GM) and machinery construction (CAT, CMI) down still?
4 Aug 2012, 01:16 AM Reply Like

radicall Comments (534)
 
No wage pressures=No spending growth=no revenue growth=low interest rates and lower P/E multiples.

Also keep in mind that Year over year I think we will see earnings fall, not rise. Yet markets move higher. Think about it this way - would you buy a Bakery that has earnings of 100K/yr for $1.5 mln even if it's growth was expected to be flat?

Yes there is 6% construction growth - but from a very low base well off any historic average and population growth. I agree that unsold/shadow inventory situation of single family homes is getting better, but still pretty bad. Most of that new construction is for rental apartments so people who lost their homes will live.

Also - adjusting for population growth we are still not positive on either construction (people growing faster than homes). And search google for "GM channel stuffing" and you will learn why auto production is up and F is near 52 week low :)
9 Aug 2012, 04:27 AM Reply Like

DeepValueLover Comments (5084)
 
Oh, I don't think we're gonna run outta bad news to fuel the TLT anytime soon!

Europe alone is like a Santa's Workshop of bad macroeconomic news.
3 Aug 2012, 03:46 PM Reply Like

chopchop0 Comments (1663)
 
I used to think the same thing, but man the market hasn't been really caring much since last fall lol (minus the early June selloff)
3 Aug 2012, 09:31 PM Reply Like