AFMC - The Economy And The Treasury Yield Curve Decoupled But Save The Rally

2024-05-27 08:21:21 ET

Summary

• S&P 500 and SPY have seen significant gains in recent weeks but ended May 24 barely positive.
• The U.S. Treasury has different tenors in Treasury Bills, Notes, and Bonds, with the 10Y Note being the benchmark.
• The Yield Curve Stiffness (YCS) and Bank Lending Margin (BLM) have shown significant deterioration in recent weeks, affecting the market rally.

Introduction

S&P 500 Index and SPY (the ETF of S&P 500), representing the U.S. and global Economy reliably in several years, have flown sky high last several weeks, their surges were dominated 12 times out of 18 days, gaining 5.34% in May, but in the last week, ending May 24 [F], it was barely in the positive column, printing 0.03%, as read Table 1....

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