Correlated Decline

I'm sick and tired of you setting me up
Yeah, setting me up
Just to knock-a knock-a knock-a me down
--Bruce Springsteen

Many investors expect stock and bond prices to move in opposite directions. In the present environment in particular, many believe that there will be a 'flight to safety' toward bonds if stocks sell off.

That may be true in the very near term, but there is an argument that, over time, stock and bond prices are positively correlated. After all, there have been secular bull markets in both stocks and bonds over the past three decades.

Is it possible that we could see the opposite? Stocks and bonds in correlated decline as interest rates refuse to be managed by bureaucrats any more and climb higher? Are we seeing early signs of such now?

no positions