TSC Weekender: The Stock-Bond Family Affair

Plus, Maximmag.com's antics and Idiot Box revisits SPY and QQQ and how they trade.
Author:
Publish date:

The thrills and spills of the market are the stuff that legends are made of. Or at least short stories. But we think they're particularly well-suited to a different kind of story-telling, which is why we're happy to present the "Titans of Finance" comic strip beginning this weekend. We also have Caroline Humer, our brokerage reporter, giving the skinny on Hollywood's latest take on the Street,

Boiler Room

. Plus Jim Cramer returns to The Cutting Room.

Bonds Say Tomato, Stocks Say Tomahto

Bonds and equities acted like a dysfunctional married couple this week, with two announcements highlighting their issues. The

Federal Open Market Committee

Wednesday

announced a 25-basis-point increase in the target federal funds rate, to 5.75% from 5.5%. Major indices pulled back slightly and the equities, as they often do in times of stress, looked to bonds for cues. But they would find no help there.

On Wednesday, the

Treasury Department's

announcement that it will slash the number of bonds it sells, possibly even phasing out the 30-year Treasury, sent the bond market into a tizzy. Prices leaped and yields, which move in an inverse relationship to price, were so depressed they couldn't get out of bed. As the week progressed, the yield curve got totally out of whack.

So what else could equities do but simply go about their business? After all, the hike was no surprise. In fact, the Fed's statements and movements lately haven't bothered equities one hair. With a strong January

employment report on Friday, the possibility of another rate hike draws nearer. Maybe that might get the equities market's attention. But then again, it hasn't so far, so maybe not.