Kensho Stats

Here’s how stocks should react if Bill Gross is right about a bond bear market

Bill Gross
Reuters
Bill Gross

Bond guru Bill Gross of Janus Capital predicted Tuesday that if the 10-year Treasury yield breaks out above a key chart level of 2.6 percent a "secular bear bond market has begun."

Recent history suggests a bond bear (falling prices/rising yields) will be good for the stock market and Goldman Sachs, at least in the near term, CNBC PRO found.

It's tough to get an idea about how today's market will react to such a scenario over the long term since yields have been in a downward trend since the 1980s. For a short-term view, we looked at what happened to the Dow Jones industrial average, Dow members and market industry groups during one-month declines in bond prices in the last decade and here's what we found.

Using hedge fund analytics tool Kensho, we found the iShares 20+ Year Treasury Bond ETF — a good proxy for the bond market — declined 5 percent or more over a one-month period 24 times in the last decade.