The verdict is in. The UST 10YR Yield is reading Japanese/Chinese/European PANIC (i.e. global growth slowing) as bearish ... as it should.
It’s 2.29% for the UST 10YR this morning… That’s a 2 week-low as the total return of the Long Bond in 2014 continues to be:
A) higher than most U.S. stock market averages and
B) without all the SEP-OCT volatility
If you’re new to Hedgeye research, we’ve been making this non-consensus bearish call on Treasury yields and global growth slowing throughout 2014 despite a ton of naysayers.
Case in point was the first week of September when hedge fund manager David Tepper grabbed headlines proclaiming to Bloomberg’s Stephanie Ruhle that we were witnessing “the beginning of the end of the bond market rally."
That hasn’t worked out so well.
After beginning 2014 at 3%, the yield on the ten-year fell to less than 2.4% during the summer, and is currently trading south of 2.30%. Hedgeye CEO Keith McCullough and our macro team thinks yields go lower from here and are continuing to advise our customers to stay long TLT.