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Currently, we’ve seen the bond yields really starting to rise sharply since bouncing off support back in the early part of February. Basically, gone vertical from about 3.3 and today we’re hitting four percent on the 10-year deal.

In fact, a downtrend line has been cracked just about two weeks ago. We came back down and tested that structure line and had been going up unimpeded all the way up towards four percent.

The reason four-year yields should be going up is because there’s a lot of inflation in the system that is selling a lot of bonds right now. We could have continued supply coming in as the treasury sells more bonds.

There’s just not a good risk appetite for fixed income, and people are more likely to sell bonds or buy few bonds than there are available.

It’s not over for bond yields. If you know you want to continue to look for fixed income you might want to wait a little bit more for the fields to climb a bit more before you shift money into that.

But let’s make no mistake the bond yields where they are right now are a huge competitor for Equity returns. You have to ask yourself, if the six-month yield on treasuries is trading or selling at 5.1 percent, you can get a five. Two-year yield prices are down that much, you can get a six-month return of about 5.1 percent.

Is that going to be better than stocks over the next six months? If the answer is yes you’re going to see a lot more money flowing into bonds to capture that yield.

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