Treasury Movements Signal Long-Run Doubt - ProShares Ultra 7-10 Year Treasury ETF (NYSEARCA:UST) | Seeking Alpha

Treasury Movements Signal Long-Run Doubt - ProShares Ultra 7-10 Year Treasury ETF (NYSEARCA:UST) | Seeking Alpha



Here is an important article about comparisons of 10-year and 2-year treasury yields.  UST, a 7-10 year government bond ETF,  has gained more than 10% in the past year, and TLT, the 20+ year bond ETF, has also increased more than 10%.  People are fleeing to the safety of government bonds because they don't trust the stock market.  Of course, when bond prices rise, the yields fall, and the 10-year bond yield was at 2.34% on Friday, August 15.



The 2-year yield has been staying around .4%, but the 10-year bond yield is falling in that direction although the two yields will probably not meet as long as Federal Reserve rates are low.  If the spread was increasing, that would indicate a buying opportunity for stocks, but we have the opposite situation presently.  Expansion of stocks has occurred when the 10-2 spread was more than 2%, but it is now less than 2% with the Friday 2-year yield at .42%.  The U.S. Treasury has a website page where the interest rates can be viewed together.  So, we need to be careful about owning a lot of stocks now, and my government bond holdings equal 24% of my portfolio currently.