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On Friday the Fast Money pros were closely watching action in the S&P, which held above 1400 – a 4-year milestone. Also the latest move in the bond market landed in the spotlight. “Treasury yields on Tuesday morning were 2.03% - they’re now 2.31%, says trader Joe Terranova . That’s a 25 point basis move. That’s telling you something.”But is that something – that a wall of money is coming into the stock market?
Terranova thinks that's exactly what the action is saying. He believes a chase for performance is about to explode across the market largely because Terranova doesn’t think money managers expected the market to gain 15% over the past 3 months.“Now, there are only 2 weeks left in the quarter – money managers will be chasing gains aggressively,” he says.
Trader Steve Grasso agrees. “Guys who want to get into the market have not had the opportunity – now, they’re forced to chase.”
If you agree with the thesis, Terranova suggests putting money to work in global growth names such as Potash and JoyGlobal.Trader Patty Edwards considers the stock market advance and bond market decline, a vote of confidence in the US recovery. “I like industrials because the economy is getting stronger and technology too,” she says.
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