By Joe Chase of IndexBeating.com
Even as investors priced stocks higher for the 4th straight session, the yield on the Treasury 10-year note fell below 3%, touching the lowest levels ever. This means that for the long term, 10 years, investors are willing to accept a risk free rate of return of 3%. Although the stock market has rallied for the past 4 days, this suggests the bottom is yet to come and there are lots of people still running for safety.
See also: Bloomberg, Yahoo! Finance
Since the yield of something goes down as price goes up, a declining Government debt yield means an increasing price, which means increased demand for “risk free” securities.
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