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Bonds are saying deflation, stocks are saying inflation...
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Thursday, October 08, 2009
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From The Pragmatic Capitalist:

Stocks have surged 11% since June 10th. At the same time, the 10 year treasury yield has declined almost 70 basis points to close at 3.18% yesterday. What is curious here is that the stock market is telling a very different story from the bond market. Bond investors (who tend to have a longer time horizon) are forecasting a long battle with deflation.

Equity investors (who tend not to think much farther than one quarter into the future), on the other hand, are putting their money on the line in the hopes that the reflation trade is alive and well.

Unfortunately for equity investors, they have a poor record of forecasting the future when compared to bond investors.

Read full article...

More on bonds:

An avalanche of corporate defaults is coming

Warren Buffett makes BIG bet on fixed income

PIMCO's Bill Gross no longer worried about inflation

Topics: Bonds | Stocks | Cruxallaneous
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