Bond yields confirm small cap vote for economic slowdown

Another look at the bearish small cap divergence is found in the below chart, showing a ratio of the Russell 2000 small cap index over the S&P 500 index since 2006. Each time we saw this break down since 2010, the Fed raced to the rescue with another round of QE; this time they are tightening tapering, not adding more.
small cap over S&P
The 10 year Treasury yield is so far confirming the small cap vote for slower growth ahead.
10 year yield May 7 2014
Sure HFT gamers don’t care about sales, income, jobs, economic growth or valuations, but alas, the real world must. The following chart courtesy of John Hussman shows that 49% of the Russell 2000 stocks have now entered a bear market with losses of 20% or more so far.
Russell 2000 down hard

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