In what I view as a strong contrarian indicator, Long Treasury ETF Posts Record Outflow in Duration Rotation.

Some investors are paring exposure to longer-maturity U.S. debt as the Federal Reserve moves closer to normalizing borrowing conditions in the midst of a leadership transition.

The iShares iBoxx $ Investment Grade Corporate Bond ETF was hit by $460 million of outflows last week, its fourth-biggest withdrawal of the year. The $38.6 billion fund has an effective duration of 8.8 years, meaning it’s acutely vulnerable to price swings spurred by interest-rate changes.

By contrast, shorter-maturity Treasury and corporate funds saw inflows last week, including the SPDR Bloomberg Barclays Short Term High Yield ETF, the iShares 0-5 Year Corporate Bond product and SPDR’s 1-3 Month Treasury Bill fund.

Treasury Yields

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There is no reason to believe the long-term treasury bull market is over, either fundamentally or technically. The trend is down, down, down.

Money managers pulling out now will likely chase the rally when it's clear the economy is going nowhere. By then, yields may be much lower.

I stick with my call made two days ago: I Expect New Record Low Long Bond Yield.

Despite all the economic cheerleading about the allegedly strengthening economy, I see things differently. Job growth is shrinking. Average the last two months to smooth out the hurricanes and you get growth job growth of 114,000. For now, it's still positive.


Household formation is the weakest since 2010.

Hooray, autos rebounded. However, 100% of that rebound is due to hurricane replacement. It won't last.

Rental Vacancies Are Rising. What will that do to new apartment construction?

What growth we have is due to a diminishing savings rate . That's another hurricane aspect that won't last.

Construction Spending Shows Serious Signs of Rolling Over.

If the economy was getting stronger, trends in long-term treasury yields would not look like they do.

Mike "Mish" Shedlock

Good News: Public Union Membership About to Dive

The Supreme Court has agreed to hear the case of Janus vs AFSCME. The expected outcome will reduce public unions.

Question of the Day: Is the Bond Bull Market Over?

Amidst talk of red lines, trends lines, and common sense lines, the debate lingers: Is the bond bull market over or not?

Bitcoin Fad Fading: For Now or for Good?

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ECB to Keep Negative Rates for "At Least" Another Year: Treasuries Rally

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When Good News No Longer Matters

Many times it's not the news that significant, but rather the stock market's reaction to the news.

Treasury Yields Surge: Crowded Bet a Winner for Now

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Equities Hammered in Coronavirus Bull Trap Sea of Red

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Despite Record Bull Market, Pension Plans in Miserable Shape: Illinois the Worst

The amount owed to retirees accelerated faster than assets on hand despite a record bull market.

Spotlight on the Timing of Treasury Shorts

The lead-in chart, also posted yesterday, shows the progression of treasury shorts. Let's now look at yields and timing.