RELATIVE BOND MOVES…
hTOP CHART is USZ 1987 contract. The sell off started in March 1987, and went over 20 points (from just below PAR to around 77)…until the October 1987 STOCK CRASH!
Of course, the contract at that time had an 8% coupon. The YIELD move during that time went from 7.5% in March 1987 to just above 10% in October.
So…the % in crease in yield was 33% (from 7.5 to 10%)
NOW….take a look at the lower panel. That’s the current bond contract. Topped in January 2015 around 171. Now trades 154-11. So around 17 handles.
The YIELD move has been 2.20 to 3%. Not even 80 bps, right?!?!?
BUT THE PERCENTAGE MOVE is 35%…. and it’s in a much shorter time frame…and some guys are saying the bear market has just started.
Still want the 401k 100% in the SP?
