- There’s an important disconnect between stocks and bonds today. Specially, I am looking at two fundamental indicators for evaluating long-term interest rates.
- The first is the performance of small cap stocks relative to large caps. Typically, this ratio has moved in concert with the 30-year treasury yield.
- The second indicator I’m watching is the relative performance of the most economically-sensitive sectors in the stock market (something I call the Economic Predictors Index).
For further details see:
Can The Fed Afford To Tighten Into An Economic Slowdown?