presentation1

The Fed, Stocks, & Bonds

By Paul Winghart, Economic Strategist

A graphic look into the

new relationship between the Treasury Market and the Stock Market. A new beginning, forged from

the fires of ardent monetary and regulatory policies set in place by

the Federal Reserve

In 2013, the direction between the U.S. Treasury Yield Curve Difference (the yield spread between the 3mo/10yr minus the yield spread of the 2yr/30yr) and major equity indexes started to correlate uncharacteristically close. For 35 years prior to 2013, the YCD and the Dow Jones Industrial Average had a statistically significant negative correlation of (-) 0.68. Over the last 2 ¼ years, though, that correlation has been flipped on its head. By way of comparison, since January of 2013 the correlation coefficient is now (+) 0.92. It is our belief that this change stems from the Fed’s evolution of what is now an overly aggressive deleveraging presence in the economy. The combination of reduced LSAP in conjunction with tighter regulations is wreaking havoc on the financial sector and leaving the policymakers (inadvertently) in almost complete control of the markets. As such, we believe that the YCD is a forward-looking measure into the real-time performance of the economy relative to its potential and the financial sector relative to the economy. History has shown that should the YCD get below -100bps, the Fed is forced introduce more liquidity into the system.

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In B

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Daily U.S. Treasury Yield Curve Difference Versus The Dow Jones Industrial Avg January 2nd, 2013 - May 14th, 2015

(3mo/10yr Curve minus 2yr/30yr Curve) Data Source: U.S. Treasury Department, Yahoo Finance Chart by Winghart

DJIA

Yield Curve Difference

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Daily U.S. Treasury Yield Curve Difference Versus 3M Co. January 2nd, 2013 - May 14th, 2015


MMM


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In B

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Daily U.S. Treasury Yield Curve Difference Versus American Express Co. January 2nd, 2013 - May 14th, 2015


AXP


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In B

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Poi

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Daily U.S. Treasury Yield Curve Difference Versus Apple Inc. January 2nd, 2013 - May 14th, 2015


AAPL


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In B

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Daily U.S. Treasury Yield Curve Difference Versus Boeing Co./The. January 2nd, 2013 - May 14th, 2015


BA


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In B

asis

Poi

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Daily U.S. Treasury Yield Curve Difference Versus Caterpillar Inc. January 2nd, 2013 - May 14th, 2015


CAT


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$135.00

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In B

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Poi

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Daily U.S. Treasury Yield Curve Difference Versus Chevron Corp. January 2nd, 2013 - May 14th, 2015


CVX


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In B

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Poi

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Daily U.S. Treasury Yield Curve Difference Versus Cisco Systems Inc. January 2nd, 2013 - May 14th, 2015


CSCO


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$30.00

$32.00

$34.00

$36.00

$38.00

$40.00

$42.00

$44.00

$46.00

1/4/

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4/4/

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7/21

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8/8/

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8/26

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9/13

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10/1

9/1

11/6

/13

11/2

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2/1

12/3

0/1

1/17

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14

2/22

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4/17

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6/28

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9/26

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In B

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Poi

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Daily U.S. Treasury Yield Curve Difference Versus Coca-Cola Co./ The January 2nd, 2013 - May 14th, 2015


KO


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$85

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Poi

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In U

SD ($

) Daily U.S. Treasury Yield Curve Difference Versus EI du Pont de Nemours & Co.

January 2nd, 2013 - May 14th, 2015 (3mo/10yr Curve minus 2yr/30yr Curve)

Data Source: U.S. Treasury Department, Yahoo Finance Chart by Winghart

DD


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$105

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In B

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Poi

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In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Exxon Mobile Corp.



XOM


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$17

$19

$21

$23

$25

$27

$29

$31

1/4/

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/13

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/13

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/13

9/13

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10/1

9/1

11/6

/13

11/2

4/1

12/1

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0/1

1/17

/14

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14

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10/1

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11/1

9/1

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12/2

5/1

1/12

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In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus General Electric Co.



GE


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30

$100

$120

$140

$160

$180

$200

$220

1/4/

13

1/22

/13

2/9/

13

2/27

/13

3/17

/13

4/4/

13

4/22

/13

5/10

/13

5/28

/13

6/15

/13

7/3/

13

7/21

/13

8/8/

13

8/26

/13

9/13

/13

10/1

/13

10/1

9/1

11/6

/13

11/2

4/1

12/1

2/1

12/3

0/1

1/17

/14

2/4/

14

2/22

/14

3/12

/14

3/30

/14

4/17

/14

5/5/

14

5/23

/14

6/10

/14

6/28

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7/16

/14

8/3/

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8/21

/14

9/8/

14

9/26

/14

10/1

4/1

11/1

/14

11/1

9/1

12/7

/14

12/2

5/1

1/12

/15

1/30

/15

2/17

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3/7/

15

3/25

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4/12

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4/30

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5/18

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In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Goldman Sachs Group Inc.



GS


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-50

-30

-10

10

30

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

1/4/

13

1/22

/13

2/9/

13

2/27

/13

3/17

/13

4/4/

13

4/22

/13

5/10

/13

5/28

/13

6/15

/13

7/3/

13

7/21

/13

8/8/

13

8/26

/13

9/13

/13

10/1

/13

10/1

9/1

11/6

/13

11/2

4/1

12/1

2/1

12/3

0/1

1/17

/14

2/4/

14

2/22

/14

3/12

/14

3/30

/14

4/17

/14

5/5/

14

5/23

/14

6/10

/14

6/28

/14

7/16

/14

8/3/

14

8/21

/14

9/8/

14

9/26

/14

10/1

4/1

11/1

/14

11/1

9/1

12/7

/14

12/2

5/1

1/12

/15

1/30

/15

2/17

/15

3/7/

15

3/25

/15

4/12

/15

4/30

/15

5/18

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Home Depot Inc/ The.



HD


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$10

$15

$20

$25

$30

$35

$40

1/4/

13

1/22

/13

2/9/

13

2/27

/13

3/17

/13

4/4/

13

4/22

/13

5/10

/13

5/28

/13

6/15

/13

7/3/

13

7/21

/13

8/8/

13

8/26

/13

9/13

/13

10/1

/13

10/1

9/1

11/6

/13

11/2

4/1

12/1

2/1

12/3

0/1

1/17

/14

2/4/

14

2/22

/14

3/12

/14

3/30

/14

4/17

/14

5/5/

14

5/23

/14

6/10

/14

6/28

/14

7/16

/14

8/3/

14

8/21

/14

9/8/

14

9/26

/14

10/1

4/1

11/1

/14

11/1

9/1

12/7

/14

12/2

5/1

1/12

/15

1/30

/15

2/17

/15

3/7/

15

3/25

/15

4/12

/15

4/30

/15

5/18

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Intel Corp.



INTC


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$140

$150

$160

$170

$180

$190

$200

$210

1/4/

13

1/22

/13

2/9/

13

2/27

/13

3/17

/13

4/4/

13

4/22

/13

5/10

/13

5/28

/13

6/15

/13

7/3/

13

7/21

/13

8/8/

13

8/26

/13

9/13

/13

10/1

/13

10/1

9/1

11/6

/13

11/2

4/1

12/1

2/1

12/3

0/1

1/17

/14

2/4/

14

2/22

/14

3/12

/14

3/30

/14

4/17

/14

5/5/

14

5/23

/14

6/10

/14

6/28

/14

7/16

/14

8/3/

14

8/21

/14

9/8/

14

9/26

/14

10/1

4/1

11/1

/14

11/1

9/1

12/7

/14

12/2

5/1

1/12

/15

1/30

/15

2/17

/15

3/7/

15

3/25

/15

4/12

/15

4/30

/15

5/18

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus IBM Corp.



IBM


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$30

$35

$40

$45

$50

$55

$60

$65

$70

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus JPMorgan Chase & Co.



JPM


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$40

$50

$60

$70

$80

$90

$100

$110

$120

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Johnson & Johnson.



JNJ


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$75

$80

$85

$90

$95

$100

$105

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus McDonald's Corp.



MCD


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$30

$35

$40

$45

$50

$55

$60

$65

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Merck & Co Inc.



MRK


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$10

$15

$20

$25

$30

$35

$40

$45

$50

$55

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Microsoft Corp.



MSFT


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Nike Corp.



NKE


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$20

$22

$24

$26

$28

$30

$32

$34

$36

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Pfizer Inc.



PFE


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$50

$55

$60

$65

$70

$75

$80

$85

$90

$95

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Proctor & Gamble Co/The.



PG


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$40

$50

$60

$70

$80

$90

$100

$110

$120

1/4/

13

1/22

/13

2/9/

13

2/27

/13

3/17

/13

4/4/

13

4/22

/13

5/10

/13

5/28

/13

6/15

/13

7/3/

13

7/21

/13

8/8/

13

8/26

/13

9/13

/13

10/1

/13

10/1

9/1

11/6

/13

11/2

4/1

12/1

2/1

12/3

0/1

1/17

/14

2/4/

14

2/22

/14

3/12

/14

3/30

/14

4/17

/14

5/5/

14

5/23

/14

6/10

/14

6/28

/14

7/16

/14

8/3/

14

8/21

/14

9/8/

14

9/26

/14

10/1

4/1

11/1

/14

11/1

9/1

12/7

/14

12/2

5/1

1/12

/15

1/30

/15

2/17

/15

3/7/

15

3/25

/15

4/12

/15

4/30

/15

5/18

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Travelers Cos Inc/The.



TRV


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$50

$60

$70

$80

$90

$100

$110

$120

$130

1/4/

13

1/22

/13

2/9/

13

2/27

/13

3/17

/13

4/4/

13

4/22

/13

5/10

/13

5/28

/13

6/15

/13

7/3/

13

7/21

/13

8/8/

13

8/26

/13

9/13

/13

10/1

/13

10/1

9/1

11/6

/13

11/2

4/1

12/1

2/1

12/3

0/1

1/17

/14

2/4/

14

2/22

/14

3/12

/14

3/30

/14

4/17

/14

5/5/

14

5/23

/14

6/10

/14

6/28

/14

7/16

/14

8/3/

14

8/21

/14

9/8/

14

9/26

/14

10/1

4/1

11/1

/14

11/1

9/1

12/7

/14

12/2

5/1

1/12

/15

1/30

/15

2/17

/15

3/7/

15

3/25

/15

4/12

/15

4/30

/15

5/18

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus United Technologies Corp.



UTX


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$15

$35

$55

$75

$95

$115

$135

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus UnitedHealth Group Inc.



UNH


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$30

$35

$40

$45

$50

$55

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Verizon Communication Inc.



VZ


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$20

$30

$40

$50

$60

$70

$80

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Visa Inc.



V


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$50

$55

$60

$65

$70

$75

$80

$85

$90

$95

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Wal-Mart Stores Inc.



WMT


-170

-150

-130

-110

-90

-70

-50

-30

-10

10

30

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

1/3/

13

1/21

/13

2/8/

13

2/26

/13

3/16

/13

4/3/

13

4/21

/13

5/9/

13

5/27

/13

6/14

/13

7/2/

13

7/20

/13

8/7/

13

8/25

/13

9/12

/13

9/30

/13

10/1

8/1

11/5

/13

11/2

3/1

12/1

1/1

12/2

9/1

1/16

/14

2/3/

14

2/21

/14

3/11

/14

3/29

/14

4/16

/14

5/4/

14

5/22

/14

6/9/

14

6/27

/14

7/15

/14

8/2/

14

8/20

/14

9/7/

14

9/25

/14

10/1

3/1

10/3

1/1

11/1

8/1

12/6

/14

12/2

4/1

1/11

/15

1/29

/15

2/16

/15

3/6/

15

3/24

/15

4/11

/15

4/29

/15

5/17

/15

In B

asis

Poi

nts

In U

SD ($

) Daily U.S. Treasury Yield Curve Difference* Versus Walt Disney Co/The



DIS


0.92 0.94 0.93 0.93 0.93 0.91 0.91 0.91 0.89 0.89 0.89 0.89 0.89 0.88 0.88 0.87 0.86 0.83 0.79 0.80 0.77 0.75 0.72

0.68 0.66

0.57

0.40 0.34 0.37

-0.06

-0.70

-1.0

-0.9

-0.8

-0.7

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0 D

ow Jo

nes I

ndus

trial

Ave

rage

Am

eric

an E

xpre

ss

EI d

u Po

nt

Wal

t Dis

ney

Uni

tedH

ealth

Gro

up

Inte

l M

erck

3M

M

icro

soft

Vis

a Tr

avel

ers

J&J

Nik

e H

ome

Dep

ot

JPM

orga

n G

oldm

an S

achs

C

isco

Pr

octo

r & G

ambl

e B

oein

g U

nite

d Te

chno

logi

es

Wal

-Mar

t Pf

izer

C

oca-

Col

a G

ener

al E

lect

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App

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Veriz

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Exxo

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IBM

Correlation Coefficients of the U.S.Treasury Yield Curve Difference & Members of the Dow Jones Industrial Average

January 2nd, 2013 - May 14th, 2015 Data Source: U.S. Treasury Department, Yahoo Finance, St. Louis Federal Reserve Chart by Winghart

Inverse Correlation

No Correlation

Perfect Correlation

-200

-100

0

100

200

300

400

500

600

700

800

900

1000

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

500

600

May-78 Jun-81 Jul-84 Aug-87 Sep-90 Oct-93 Nov-96 Dec-99 Jan-03 Feb-06 Mar-09 Apr-12 May-15

Bas

is P

oint

s

Bas

is P

oint

s Historical Average Monthly U.S. Treasury Yield Curves

May 1978 - May 2015 (MTD as of 5/15/15) Data Source: U.S. Treasury Department, Bloomberg L.P. Chart by Winghart

3mo/10yr

2yr/30yr

Difference

The economic fundamental known as surplus productivity has deflected upward growth in the YCD on a number of occasions since the late 1970s. It appears it has done so again here in April. Therefore, just as the YCD and the DJIA moved up together courtesy of the Fed, the are likely to move lower together too.

Thank you Paul Allen Winghart www.surplusproducivity.com [email protected] (email) SurplusProductivity@SProductivity (Twitter) http://www.linkedin.com/pub/paul-winghart/12/779/390 (LinkenIn) The material contained herein is not a product of any research department . Nothing herein constitutes a recommendation of any security or regarding any issuer; nor is it intended to provide information sufficient to make an investment decision. The information contained in this communication has been compiled by surplusproductivity from sources believed to be reliable, but no representation or warranty, express or implied, is made by surplusproductivity, its affiliates or any other person as to its accuracy, completeness or correctness. All opinions and estimates contained in this communication constitute surplusproductivity judgment as of the date of this communication, are subject to change without notice and are provided in good faith but without legal responsibility. Nothing in this communication constitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation to clients and may have been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The investments or services contained in this communication may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Every state in the U.S., and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, any specific securities discussed in this communication may not be eligible for sale in some jurisdictions. This communication is not, and under no circumstances should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction to the fullest extent permitted by law neither surplusproductivity nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this communication or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of surplusproductivity may buy from or sell to customers on a principal basis in the securities or related derivatives that are the subject of this communication. Additional information is available upon request. As of this time, this material is free of charge, so long as you link back to this site and source any information you may use

presentation1

Documents

3mo10yr curve

treasury department

treasury market

2yr30yr curve data source

inbasispoints daily

economy relative

yahoo finance chart

paul winghart