Interest Rates And Banks At Critical Inflection Points

by Chris Kimble

In the past 5-weeks, 10-Year Yields have declined 26%, 5-year yields are down 24% and 2-year yields are down 17%. Is there more of a decline in yields to come?

How would stocks react if yields rally off support? Could bank start reflecting relative strength if yields rally here?

This chart reflects that the swift declines of late have 2, 5 & 10-year yields testing 7-year support at each (1).

As yields are testing long-term support the Bank Index (BKX) is doing the same thing (lower right chart).

Joe Friday Just The Facts Ma’am; Stocks in the states and around the world are hopeful that yields and banks rally off these long-term support levels.