I got to thinking the past week or so...there is an old adage in the capital markets that "the bond market is always right". Well something doesn't seem to add up right now: Stocks hitting new highs while bond yields hit near 1yr lows. What does the bond market know that the stock market doesn't seem to know, or at least care about? The answer is likely the economy appears to be slowing and right when the Fed has started tapering their bond purchases. Could be the Ukraine situation as well.
And remember the great rotation in 2013 out of Fixed Income and into Equities? Well there is a great reverse rotation going on and has been for a while. Imagine pension funds who are now "near fully-funded" taking money off the stock market table and going back into rates that are 100+bps higher than a year ago?
Whatever the reasons, these two charts show the story: