We suspect as we head into April earnings season (top S&P 500 Index components AAPL, XOM, GE, CVX, IBM for example are all slated to report earnings between 4/18 and 4/26, among other names and sectors), that there still exists some trepidation among portfolio managers in regards to the equity markets’ valuations at current levels, and thus the “stubborn bid” in U.S. Treasury bonds continues to appear.
The upcoming earnings season, coupled with the continued fears that surface in regards to the Eurozone and Emerging Markets failure to participate in 2013’s equity rally, seem to give credence to the action that we are seeing in U.S. Treasuries, and brings to mind other segments of the Treasury bond market that have seen inflows and strong price action in recent sessions as well, namely IEF (iShares Barclays 7-10 Year Treasury Bond, Expense Ratio 0.15%), SHY (iShares Barclays 1-3 Year Treasury Bond, Expense Ratio 0.15%), and SHV (iShares Barclays Short Treasury Bond, Expense Ratio 0.15%).
For in the case of both IEF and SHY, both products are trading at multi-month highs and these funds have seen a jolt of activity recently in terms of surging trading volume and notable net asset inflows.
iShares Barclays 7-10 Year Treasury Bond
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