Last week the Treasury Bills Primary market auction gave investors almost 17% in that market so investors will be looking for north of 17% in the bonds market. That is a bad sign for the stock market which is looking like its extended at this point and needs to cool.

Bonds market is a much bigger market than the stock market. What the big boys do there always impacts the stock market investors. The problem with these interest rates is that although they seem high, they are sharply lower than the inflation problem in the economy.

The CBN has allowed inflation to snowball into a monster over the past 8 years and now we have reached an inflection point where we should not be surprised to see interest rates north of 20% in the short term to tame that inflation monster. That will impact stock market whether we like it or not. It will suck up most of investors funds because that will just be too good to let go because its risk free return and the traders in that market are playing in tens of billions if not hundred of billions. There are some investors who don't even enter the stock market when the yields are that high in the bonds market. 

Stock market has had a great rally this year and some stocks like TRANSCORP , TRANSCORPHOT , MRS , CONOIL , SEPLAT , CWG & DANGSUGAR and some other lesser known micro-caps have turned into gold for early investors. We should tame our expectations for the next few months especially if we get a Santa rally.