LG, that sounds like a very probable scenario to me. my feeling (sorry<g>) is that at the moment there is a wait and see attitude predominating with regards to the bond market. many players are probably prepared to jump in, but are hoping to see higher yields first...or rather, want to wait for economic data relating to inflation before jumping in. but most probably the buying of bonds will as you say coincide with selling in the stock market, as assets are shifted from one to the other. this should in fact happen sooner rather than later, as December is an unlikely month for such 'big money' transactions to take place, for fear that settlement problems might arise due to Y2K.
one should probably prepare for the mother of all buying opportunities in stocks coming along on January 2, UNLESS Y2K has worse effects than currently advertised. the U.S. army and navy are reportedly preparing for the possibility of a worst case scenario...if such a scenario were to come to pass, a global recession as predicted by Dr. Yardeni would surely ensue, in which case bonds would continue to outperform stocks in early 2,000.
otoh, if it's a non-event, we'll probably get a massive rally in stocks.
regards,
hb |
