At least at the Citigroup, the bull market never ends. That is unless and until they have to beg the American taxpayer for billions in bailout money.
“We think [the reason for falling yields is] pretty technical. Look at jobs, auto sales, planned capital expenditures — none of that is indicative of something ominous in the economic data.”
So what explains it? Levkovich believes the justification for the bond rally has been driven by technical factors like people covering short positions, which he’s heard that banks and a number of institutions have had to do.
The bottom line in his view is that “people have been reading a little too much into it.”
Reading a little bit too much into it? Huh. I am not sure how many times investors have to learn the hard way not to discount what the bond market is telling them. What is the bond market saying?
As the most recent action indicates, it is screaming out that the recession is just around the corner. You can learn more about it in my previous post The Shocking Truth Behind The Bond Market Conundrum Explained
This is further confirmed by our mathematical and timing work. It shows a severe bear market between 2014-2017 that will retrace most of the gains accrued over the last few years. One thing is for sure, ignoring today’s yield curve compression (at this stage of the bull market) will be very detrimental to your overall wealth.
