Mar 10, 2020 - Economy & Business

There Is No Alternative to Treasuries

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Data: FactSet; Chart: Axios Visuals

The acronym TINA (There Is No Alternative) had long been used to explain why investors piled into U.S. equities, but it may now apply to U.S. Treasuries.

State of play: After Monday's sell-off, the S&P 500 has erased all of its gains dating back a year, and the dollar, emerging market equities and oil are all negative during that period.

  • Treasuries have become the de-facto defensive asset for the market and "investors have to make sure that they have enough cash on the sidelines to meet whatever their cash needs are for at least the next year," Richard Steinberg, chief market strategist at The Colony Group, tells Axios.

On the other side: Benchmark 10-year Treasury yields (which move inversely to prices) have fallen by almost 150 basis points since the start of the year, meaning holders of U.S. government bonds have seen significant price appreciation.

  • Traditional safe havens gold and the Japanese yen have both gained a little more than 5% for investors year to date, but that is quaint in comparison to the staggering move in Treasury yields from their Jan. 1 levels.

Go deeper: Treasury yields are sinking toward record lows

Go deeper

U.S. bond yields go negative again as investors seek coronavirus safety

Data:; Chart: Axios Visuals

U.S. Treasury yields on one-, two- and three-month maturities all turned negative late Monday, as investors continued to favor short-term debt that functions like cash.

What it means: “What you are seeing today is an example of a flight-to-safety on a massive scale,” Kathy Jones, chief fixed-income strategist at Charles Schwab, told FT on Wednesday when yields first fell below zero.

Quantitative easing's return sends bond yields soaring

Data:; Chart: Axios Visuals

Longer-dated U.S. Treasury yields have bounced higher in recent days, with the benchmark 10-year note fully reversing course and rising to more than double its lowest level on Tuesday.

What's happening: The announcement of $1.5 trillion in repo injections on Thursday by the New York Fed followed two announcements about increasing the amount of cash it was injecting in its repo operations this week. The deluge has given yields a significant bounce.

Stocks surge 4% after Wall Street's worst day since 2008

Photo: Timothy Clary/AFP via Getty Images

The stock market closed up more than 4% on Tuesday, recovering half of the losses from Monday's sell-off.

Between the lines: The Trump administration signaled it will work with Congress to try to shore up the economy amid concerns about the effects of the spreading coronavirus and collapsing oil prices.

Go deeperArrowUpdated Mar 10, 2020 - Economy & Business