Obviously the big story in the financial markets this week was the surge in stock prices, capped off by Thursday's blockbuster rally that brought the Dow back above 12,000 for the first time since August.
The other story this week was the corresponding sell-off in Treasuries, where yields on the benchmark 10-year note hit 2.40%, the highest since August 9, before retreating a bit to 2.31% on Friday. Even after Friday's relief rally, Treasuries suffered a fifth-straight weekly decline in prices, which move in opposition to yields.
Between Europe's progress and better-than-expected U.S. economic data, Treasuries got hit by a "double punch" this week, says Peter Fisher, global head of fixed income at BlackRock, which has about $1.2 trillion of fixed-income assets under management.
But Fisher doesn't believe Treasury yields have much further to rise for two main reasons:
- It's the Economy, Stupid: "The underlying strength of the U.S. economy isn't