From the street: " Early
strength in the Treasury market faded into weakness, with
the yield on the 30-year lately at 6.20% and everyone in the
market talking about how it's headed to 6.25%. The problem
with that, noted Salomon Smith Barney equity strategist
John Manley, is that "at 6%, people say the risk is 6.25%.
At 6.25%, the risk is 6.5%."
But for all that risk in bonds, Manley suspects that it may be
time to start putting some money into them. When its yield
hit 6.15%, the long bond was down about 15% on a
total-return basis from its 52-week high. Historically, if you've
put money into the market when that happened, you've
come out ahead. Manley believes that we are entering a
period where bonds may outperform stocks.
It's an idea that's getting a lot of play lately on Wall Street. "I
think in the next 6 to 12 months, the two asset classes are
going to be neck-and-neck in terms of return," said Crane,
adding that at some point on that timeline, bonds will have
outperformed. One gets the sense that there are a lot of
portfolio managers waiting to see a turn in the bond market,
hoping to move money into it.
They're raising that money now, and they're doing it by
selling stocks.
I took some profits on mspg early morning. Will be back again when the market stablizes a little bit. Still waiting and watching.
Iris |
