The US economy remains strong, bonds under pressure sending yields even higher. 5% riskless is now the norm…. giving stocks a run for the $.In case you missed it…….The US economy continues to show strength, the labor market remains strong and inflation expectations remain front and center………So, the bond market came under pressure as selling intensified and that sent Treasury yields higher…..– the 10 yr. now yielding 4.307%, the 2 yr. is at 4.912%, the 3 & 6 month bills are yielding 5.
Again, a 10% decline would be considered ‘normal’ in regular trading….so the indexes are still acting normal…but we all know that individual names can already be in correction territory – that would be a > 10% move lower….META -12%, AAPL -11%, MSFT – 12%, TSLA – 27%, F – 24%, NVDA – 10%, and those are just the front page names….
Where did we see the most weakness yesterday? Consumer Discretionary – XLY -1.7%, Tech, XLK -1%, Communications – XLC -1.2%, Home Builders – XHB – 3.6%, Airlines – JETS – 1.5%, Disruptive TECH – ARKK – 2.4%, Semi’s – SOXX -1% - are you seeing this? What do all of these sectors have in common? They are all up more than 15% ytd with some of them up more than 30%.... And so, yes, it makes sense that that is where investors/trader and algo’s go to get money.
Now Futures this morning are down again…Dow futures down 43, S&P’s down 7, Nasdaq down 45 and the Russell down 1. Now look, do not be surprised to see us try to bounce but then back off again as we move into the end of the day and the end of the week….they pummeled stocks into the bell on Wednesday and then again on Thursday……Today is Friday and the weekend is coming….
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