April 20, 2018

Bonds and Stocks Recouple

Doug Kass points out the relationship between stocks and bonds....

Bonds and Stocks Recouple

* Beware of the bond vigilantes
* And the recoupling could have consequences

With both stocks and bonds declining, risk parity, volatility and other risk asset trending strategies suffer and are forced to derisk.

I believe if this relationship continues (and I believe it could), we could be at the start of a meaningful near term stock market correction - particularly if the bond vigilantes reemerge ever years in their caves.