Municipals were better Friday after catching a bid in the secondary, finally following U.S. Treasuries in a flight-to-quality, while still underperforming, keeping valuations above 100% on the 10- and 30-year. Equities pared back earlier losses to end mixed after the S&P 500 dipped into bear market territory earlier in the session. “The correlation between stocks and U.S. Treasuries is finally starting to normalize,” noted Barclays PLC in a weekly report. “Whereas the two were selling off or rebounding in sync amid higher inflation expectations and a hawkish Fed, over the past several weeks, the relationship has reverted to historical averages, with equities selling off in a risk-off environment while Treasuries rallied.”
Source: The Bond Buyer
