The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
The Dow is at a record high and the S&P 500 is thisclose to joining its blue chip brother. But as investors become more and more giddy about stocks, bonds have suffered collateral damage.
The yield on the 10-year U.S. Treasury note is currently hovering at a level just north of 2%. While that’s still extremely low by historical standards, it’s an 11-month high. And yields, which rise when bond prices fall, were as low as 1.56% as recently as early December. So bonds have sold off pretty dramatically in a period of three months … the same time stocks have surged.
As long as the U.S. economy continues to show gradual (albeit tepid)…
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