How's the saying go -- "Consistency is the hobgoblin of small minds... and the mainstream financial media?" Okay, maybe I added that last bit myself, but when the shoe fits...
Fact is, hardly a day goes by when the sequence of events relayed by one news source line up with the events of another. Case in point: these conflicting reports of Friday March 26.
First, the U.S. Treasury market finished the week with its worst loss for the year and yields on the 10-year note surged to their highest level since June 2009. As for what caused the "bleak week in bonds" -- the mainstream experts had this explanation in spades:
"What's changed is that investors outlook on the fiscal side have turned decidedly downbeat since Greece's debt woes were first splashed on the front pages of the main papers. The spotlight on Greece only helped to reveal that the US's kitchen... was itself full of cockroaches." (MarketWatch)
YET -- on the same exact day and timeframe, news coverage of the US stock market painted a completely different picture. On that front, the "Greek" situation was less a crisis than a crutch for further upside strength in the Dow. What of those pesky cockroaches? Suddenly, they had been wiped out by a hefty dose of euro zone R-AID.
Here, the following news items draw a clear, contradictory picture:
- "Stocks Rally As Greek Bailout Takes Shape." (AP)
- "Wall Street Opens Up On Greece." (Reuters)
- "Greece Accord Helps Lift Stocks. Confidence grew after leaders of the 16-nation euro zone backed a deal under which they and the International Monetary Fund would bail out Greece should their debt troubles intensify." (Wall Street Journal)
How is it possible to interpret the same exact event in two entirely opposite ways? Answer: it isn't.
Here's the thing: In the days leading up to the powerful fall in treasury prices, the March 22 Short Term Updateset the stage for dramatic week. There, our analysts presented a compelling close-up of the 30-year Treasury bond yield and wrote:
"According to the wave labels on this chart, a running triangle is ending now. This implies a sharp upward thrust in yields. The implications of the current structure indicate a push up in yields."