This ace institutional investor — a former head of research at Nomura and Bridgewater Associates and served as a managing director at Goldman Sachs — says he has “never before observed” the trio of falling equities, rising long-term Treasury yields, and declining short-term yields.
What Happened: Jens Nordvig, who is currently the founder and CEO of Exante Data and MarketReader, has highlighted a rare combination between yields and equities that has gripped the market with worries.
As the 30-Year Treasury yield hovered around 4.89% and the two-year Treasury yielded 3.80%, this phenomenon signaled a normal scenario with higher long-term yields and lower short-term yields.
However, this normal curve was followed by a fall in equities as the S&P 500 index was 16.09% lower than its previous record of 6,147.43 points, and the Nasdaq 100 was down 19.86% from its all-time high of 22,222.61 points.
Also, the Dow Jones was 18.09% below its 52-week high of 45,073.63 points.
“Over the last few decades, we have never before observed the combination of dramatic equity declines, declining short-end yields, and notable rises in 30Y rates. Nothing is …