Rising yields good for stock market

stock_trad3r · May 27, 2009

there was no good reason for the selloff today. Inflation good for economy & stocks market.

rising long term yields DEBUNKS the deflationary spiral so many had feared 3 months ago

we should recover all of today's losses later this week

Petsamo · May 27, 2009

For now, I'm bullish

BUT

We are severely overbought
GM is on the verge of BK
Kim Jong Il is playing with nukes
Rising oil prices will hamper growth
Rising interest rates won't aid home sales
Etc

So, why don't you justify why you are bullish.

nazzdack · May 28, 2009

Quote from stock_trad3r:
rising long term yields DEBUNKS the deflationary spiral so many had feared 3 months ago

It can be because of perceived default risk of treasuries and still be deflationary.

bond_trad3r · May 28, 2009

ROFL

Stock Trad3r is a funny dude.

makloda · May 28, 2009

Perceived inflationary pressures (e.g. crude oil, gold, and yields on the 10 year Treasury) = bad for stock market

http://thetechnicaltakedotcom.blogspot.com/2009/05/inflation-expectations-to-pressure.html

ByLoSellHi · May 28, 2009

Quote from stock_trad3r:

there was no good reason for the selloff today. Inflation good for economy & stocks market.

rising long term yields DEBUNKS the deflationary spiral so many had feared 3 months ago

we should recover all of today's losses later this week

The quote above is the audible equivalent of a Walrus farting onto the sun-warmed rocks upon which it lay.

Martinghoul · May 28, 2009

Quote from stock_trad3r:

there was no good reason for the selloff today. Inflation good for economy & stocks market.

rising long term yields DEBUNKS the deflationary spiral so many had feared 3 months ago

we should recover all of today's losses later this week

Hahaha! This is some seriously funny sh1te!

sirgiyan · May 28, 2009

Quote from stock_trad3r:

there was no good reason for the selloff today. Inflation good for economy & stocks market.

rising long term yields DEBUNKS the deflationary spiral so many had feared 3 months ago

we should recover all of today's losses later this week

I would call it a dearth circle.
Rising yields put pressure on borrowers (consumers, producers, etc) -> Economy slows down -> Stock market falls -> Yields drop -> Signs of recovery appear -> Stock market rises -> Yields rise (see the beginning)

That's the circle. Isn't it?

While in the early stages of economic expansion each borrowed dollar produces added value of more than 1 dollar, nowadays each borrowed dollar produces MUCH less than a dollar of additional value. The reason is simple - expansion has it's limits while borrowing hates limits - that's the main reason this death circle came to existence.
There is no escape unfortunately.

stock_trad3r · May 28, 2009

Quote from makloda:

Perceived inflationary pressures (e.g. crude oil, gold, and yields on the 10 year Treasury) = bad for stock market

http://thetechnicaltakedotcom.blogspot.com/2009/05/inflation-expectations-to-pressure.html

1974 and 1982 inflation induced bear markets were brief. The 1973-74 bear market lasted just a 18 months despite the infamous gas lines.

Since 2002 commodities, economic growth, gas prices, and stocks have risen in lockstep. We can infer that inflation is good for stocks or is indicative of economic growth.

http://finance.yahoo.com/q/bc?t=my&s=^DJC&l=on&z=m&q=l&c=spy