Today Is A Good Example Of Why The Bond Market Is Smart, And The Stock Market Is Dumb

It’s frequently stated that the bond market is a lot smarter than the stock market (bonds lead, stocks follow, etc.).

It’s probably not the case, really, but today offers up some evidence.

Moody’s downgraded Spain, and stocks are diving. Spain’s IBEX is off 1.4%.

The bond market though? You know the market that should actually be affected by a credit downgrade… is totally ignoring the ratings action.

In fact, Spanish yields are down a touch.


NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at