Email of the day 4
On Walter Deemer’s letter:
David you are more than likely right that the lows for bonds are in. It takes a rather horrible backdrop to create demand for bonds to eclipse those higher prices from last year. Near term I might disagree with Mr. Deemer that bonds will wag a stock tail. Equity weakness, which is overdue, SHOULD beget bond buying which would suggest we are ranging as opposed to trending.
Yes, you are already being proved right. If stock markets are weak due to Grexit, seasonal factors or whatever, that should temporarily steady bonds. However, I do think an eventual sharp rise in bond yields has the potential to cause some nervousness in stock markets.
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