I wrote about some reasons to be bearish that don’t make sense last week. Since then, the Dow Jones Industrial Index had posted its worst week in two years with 2 days of free fall exceeding 1000 points. In fact, had the Dow lost any ground on Friday, it would have been the index’s worst week since the financial crisis in October 2008.
I guess this provides the perfect context for discussion on reasons to be bearish that makes economic sense.
1) Treasury Bond yields are rising
10 year treasury bond yields have accelerated since the start of the year and now sits 0.841% more than it’s 1-year low in September. While 0.841% itself is rather insignificant on an absolute basis, it is actually quite a big deal due to September’s low 2% base.
The major question is what has this got to do with equities? …