What Are Bonds Telling Us?

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What Are Bonds Telling Us?
TLT

As highlighted in this past week’s Outlook Video, TLT (the long bond ETF) was setting up as an inside week which triggered today after trading above last week’s highs.

The immediate next pivot is 122.54.

As North American indices and bonds grind higher, what is TLT signaling here?

Maybe nothing.

If you ever wondered about the significance between the correlation between stocks and bonds then check out this piece from Pimco:

https://www.pimco.ca/en-ca/insights/viewpoints/does-the-stock-bond-correlation-really-matter/


Investors should care less about how the returns of assets deviate from their trends and more about the trends themselves – particularly when we are considering how bonds will perform in an equity market drawdown or in recessionary periods.

Pimco

The net-net is that the correlations matter less than the actual trends themselves and for now the trends in TLT and SPY are both up.

TLT-SPY Correlation
TLT/SPY – SPY

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What Are Bonds Telling Us?

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