The 2012 bull market continues today, as US equities drift towards new post-August 2011 highs.
One thing that’s interesting here is that Treasury yields remain at rock-bottom levels. There’s been almost no letup in demand for US bonds.
Here’s a 1-year look at the S&P vs. Treasury rates.
The green line is the S&P. Orange is the 10-year rate.
What you can obviously see is is that the green line is basically back to where it was a year ago, whereas Treasury yields are far from old levels.
Bottom line is this: Ultra-low bond yields would seem to be an indicator of panic and fear of no growth. Rising stocks, however, reflect improving growth prospects, and a belief that a collapse scenario is unlikely to play out.
Something probably has to give here.