We had an historic leap upward in the TNX on Wednesday. So, I made this chart comparing the TNX to the SPX. This is a percentage-change chart where both symbols begin at 0% and are then plotted relative to each other. The SPX is black, and the TNX is purple, (click to enlarge):
Lots of money flows between stocks and bonds every day as money managers adjust allocations based on their metrics, or panic as has been the case recently.
The TNX is an index of the yield of the 10-year treasury note, so when it goes up, that means that bonds are going down and money is probably flowing into stocks. (More info here.) So, as you would expect, the TNX and SPX generally move in the same direction.
On Wednesday, the TNX popped a massive 5.96%, but as you can see from the chart, stocks went in the opposite direction. That’s very unusual, and probably will not last.
Where did all the bond money go? Maybe it did go into the stock market, and then right out again and into the mattress. Cramer does have America on a sell-strength alert after all!
Very nice, Matt.
Nice graph. Excellent chart of what we were seeing in the numbers.
I was amazed at that situation. The TNX candle covered a very wide range.
We truly are in uncharted territory.
Thanks
If foreign gov’ts stopped buying treasuries (last I heard was that we required about 2B a day in foreign debt purchases), wouldn’t that call for the yields to rise while the stock market still crumbled?