INSTANT INSIGHT | Rate Hikes, Long Bonds, & Financials

Takeaway: Our Macro team loves Long bonds (TLT). TLT up +8.6% versus the S&P 500 down -9.6%.

INSTANT INSIGHT | Rate Hikes, Long Bonds, & Financials - TLT safewaters 10.15.14

Hedgeye CEO Keith McCullough is fond of saying that he is "the most bullish guy on Wall Street... on Long Bonds (TLT)."

Here's analysis from McCullough in a note to subscribers earlier this morning on TLT and why 10yr Treasury yields continue to fall:

"One of the few places to stay long and liquid remains the Long Bond – 10yr UST Yield was -8bps last week and is down another 2bps this morning to 1.82% - this is flattening the Yield Spread to a new cycle low of 110bps (10yr minus 2yr) and that’s one of the main reasons why the Financials (XLF) remain my fav S&P Sector short."

Below is a chart of the 10yr yield post-rate hike...

INSTANT INSIGHT | Rate Hikes, Long Bonds, & Financials - 10 yr treasury down today

... And here's how TLT has done year-to-date vs. the S&P 500

INSTANT INSIGHT | Rate Hikes, Long Bonds, & Financials - tlt v s p

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