The potential government shutdown did not provide much of a catalyst for the recent decline in the stock market, so it’s not a surprise that this weekend’s agreement out of Washington is not helping markets this morning.
It’s funny how the issue of “gamma” gets the blame for stock market declines sometimes, but never gets any credit for market advances. It does work in both directions.
The Treasury market is oversold in terms of price (& thus overbought in terms of yield). However, a short-term decline in yields down to 4.4% or 4.3% is probably not going to help the stock market for very long…as it will still leave yields very high on a longer-term basis.
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