TERM PREMIA, INFLATION EXPECTATIONS, AND THE STOCK MARKET (Part 2 of 2)

The 'tourist walks through the current stock / bond market relationship and speculates when it might break down

Remember how strategists warned the increase in yields would weigh on the Nasdaq because it was filled with tech stocks which are the longest duration equity class? In fact, your humble author even suggested as much.

Well, we were wrong. Spectacularly. At least so far.

Have a look at this chart of the Ultra long-bond future and the Nasdaq Stock Index fut…