Bonds market finished the worst week since July 2011 right before the debt ceiling due; treasury sold off across the curve, the intermediate-term yields jumped over 20bps for the week as the market continued to show better-than-expected economic data. Where initial claims (351k vs. 355k est.) remained at its downtrend position and retail sales ex-autos (0.9% vs. 0.7% est.) continued to strengthen in February. Stocks rallied strongly as funds were out flowing from the fixed income side; equities' volume traded above average, first time since early January, for four consecutive sessions this week. Investors are focusing on the housing data next week which is another major economic recovery indicator.
Technical Highlights:
• Bonds slumped, stocks rallied; equities' volume strengthened as fixed income weakened.
• Equity benchmarks and their internal showed negative divergence as the percentage of stocks above 50day moving average weakened.
• Financial led market rally, offensive stocks outperformed S&P500.
• Materials and energy stocks showed strength based on historical forward returns.
• Treasury yield curve took off led by the intermediate-term rates; however, the longer term bonds may find support as rates are trading at their 200days moving average.
read more at...
http://plus.alpbeta.com/report/201211.pdf
Technical Highlights:
• Bonds slumped, stocks rallied; equities' volume strengthened as fixed income weakened.
• Equity benchmarks and their internal showed negative divergence as the percentage of stocks above 50day moving average weakened.
• Financial led market rally, offensive stocks outperformed S&P500.
• Materials and energy stocks showed strength based on historical forward returns.
• Treasury yield curve took off led by the intermediate-term rates; however, the longer term bonds may find support as rates are trading at their 200days moving average.
read more at...
http://plus.alpbeta.com/report/201211.pdf