Stocks Trip Over Tumbling Treasuries

Stock traders often think bond traders know something they don't -- that they're smarter, or more in tune with the macroeconomic story of the day.

Over the past several months, stock investors have overturned that myth, rallying the major indices in the face of an inverted yield curve and betting on a soft landing for the economy.

The stock market was right. The slowdown came and went with a blink in the third quarter of 2006. Inflation simmered down, and fourth-quarter growth estimates ratcheted back up on rising exports, a robust labor market and unbreakable consumer spending. ...