30 year Treasury revisits its 2007 highs
Wow, talk about a disconnect between the stock and bond market – the 30 US Treasury is revisiting its highs of 2008, while the S&P index still sits about 40% above its 2009 lows. Typically, the Treasury bond market and equity market trade in a matching, inversely correlative relationship. Without question, the market is pricing in an Armegaddon that the stock market is not. Which market is panicked and which is not? That one’s rhetorical. Which one is right? That one’s not. Below is a chart of the 30 year Treasury futures contract.
I feel pretty confident that one is far off where it should be, and the mis-priced market (whichever that may be) will be adjusting very abruptly before too long.