Equity vs Bond Market
I've often heard the opinion that the bond market is smarter than the equity market. Is there any research backing that up?
Joshua Simka's avatar
I wonder if this sort of like "Sell in May and go away?" 🙃 At one point a couple years ago one SA contributor seemed to think the bond market was at least spookier than the equity market: https://seekingalpha.com/article/4276405-bond-market-is-spookier-stock-market (Halloween is right around the corner after all!) In all seriousness though, I think this might have something to do with the yield curve and correlating implications for equities? Not aware of any research though and couldn't find any with a quick Google search.
Nathan Worden's avatar
@tomato Lyn Aleden for the win :)

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Uday's avatar
It looks smarter as the pricing is relatively easier and there are lesser distortions due to institutional interest only. Retail doesnt trade bonds.

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