since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Bulls running. Like so many other days, we didn’t get interesting news. Capital flow was light again at 89%. Investors essentially remain on the sidelines. It should’ve been a meandering go-nowhere day but the S&P rallied a substantial amount.
If there’s something interesting and surprising about today it’s that interest rates climbed across the curve and the 10-year Treasury yield finally hit 3%. That was thought to be a significant level that might have negative equity consequences.
Au contraire.
At least for today. I think the equity momentum players and the perpetual dip-buyers simply did what they like to do today and the valuation considerations took a back seat.
I think the bears will get their turn shortly. I don’t think they take us to new lows for the year but I think this latest bullish swing is about over.
Interest rates are climbing. They took a bit of a break but it looks like they are about to resume their upward path. This matters. It will only be a matter of time before valuations adjust.
Here’s the plot of the 3-month T-bill yieldHere’s the plot of the 5-year’s yield
The Fed has made it as clear as day that they will continue to hike rates.
The whole yield curve is heading higher.
Equity upside (at these valuations) doesn’t look like a play I want to make. It’s all hope and tape-chasing at the moment.
See youtomorrow
,-Mike