Friday, April 17, 2009

Tracking Growth/Recovery Themes Across Markets

As the U.S. dollar has rallied against the euro (bottom chart), we see firmness in 10-year Treasury rates (second chart from bottom), buying of high yield bonds (middle chart), buying of municipal bonds (second chart from top), and buying of stocks (top chart).

It's a nice example of how intermarket themes dominate markets in a global economy. This week's theme has been one of anticipated economic recovery and growth.


mead said...

Hi Dr. Brett:
With anticipated economic recovery and growth, wouldn't market participants then be more risk seeking & if this is so, wouldn't they be pulling money out of "safer" instruments like T-notes & 30 Yr. Bonds, which would bring their price put the money into the stock market?

Thanks for the great blog!

Brett Steenbarger, Ph.D. said...

Hi Mead,

Yes, investors have been pulling capital out of Treasury debt, which is why yields have been firm per the chart.