Why the Surge in Yield?

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The ProShares UltraShort 20+ Year Treasury (TBT) has taken off this morning despite disappointing results from Wal-Mart Stores Inc. (WMT) and Cisco (CSCO). Granted, the jobless claims figures continue to argue in favor a strengthening economy, but definitely not enough (IMHO) to warrant a surge in the TBTs (in yield).

While it is difficult to reconcile the surge in yield this morning, my sense is that either this pop is a head fake that will be reversed by the weak retailer message trumping the economic numbers, or that Mr. Market is warning us that the Fed will become increasingly fearful of deflation, and instead of tapering will concoct more aggressive and creative ways of stimulating growth.

Originally published on MPTrader.com, by Mike Paulenoff.