alice

NFTRH; Something Fishy w/ Long-term Yields (priority: high)

Folks, in the last few days Telecom (anti-yields) co. Verizon has risen, Goldman Sachs & Capital One (pro-yields) have dropped and well, this…

tyx

The media are completely on top of the rising yield story, which we began months ago.

Why is Goldman doing this?

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Why is COF doing this?

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And VZ doing this?

I understand that Verizon had good earnings, but so too did Goldman Sachs as I recall.

Looking around the landscape, it appears some segments that prefer lower long-term yields are firming up. It’s still a mixed bag out there so maybe the key question is why, with such a big spike in long-term Treasury yields are the banks and financials doing so poorly?

We will work this theme going forward, but for now the reminder is that long-term yields are at important potential limit areas while the media are completely on the yields tout, while at the same time the public hates the 10yr T Note and Commercial Hedgers are very net long.

Bottom Line

While anything is possible, the indications from a sector like the Financials and contrarian sentiment, combined with our long-term yield continuum (which we maintain for a reason, after all) argue that the ‘RISING YIELDS!!!’ hysteria could have a limited shelf life.