News from Bloomberg.
The cost to hedge against rising yields on Treasuries as measured by the so-called skew in options on interest rate swaps is at a record high, according to Barclays Plc data. At more than 37 basis points, the measure is almost 40 times higher than the average before credit markets seized up in August 2007.
My point. Rising spreads reflect rising risk. Yields on low grade bonds, meanwhile, have stopped declining. This is another potentially bearish trend.
Rising risk is bad news for the markets. It is too early to worry about it, but I am paying close attention to this type of trends.
To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
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George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest
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