Stocks Falling and Rates Near All-Time Lows

The US stock markets are falling sharply this morning with the Dow Jones Industrial Average down nearly 1000 points. Fueling the panic are fears of the Coronavirus spreading. Since this really shouldn’t be a shock to the markets, as most people did expect to see the virus spread, it’s fascinating to see investors claim this is a concern.  In fact, while many were sick and dying from this savage virus, stock investors were celebrating all-time record high levels. Another example of the stock markets unjustified optimism. Of course this should have an adverse impact on global stocks. Investors just look for any and all opportunities to profit from the markets. The trend is either your drowned or your foe.

The more realistic measure of the US economy is the bond market. Right how, yields on the 10-Year Treasury Note are just above all-time record low levels. This significant move lower in yields has also contributed to mortgage interest rates being almost as low as they have ever been. Very few economists seem to have had the foresight to see this and many investment advisors had their clients sell their holdings in the 10-Year market. Well, that advice has been proven to be poor.

Right now, there is no immediate need to lock. If you choose to float, do so so carefully.