The semis are sending an important signal to the bond market: JP Morgan

Yields have tumbled over the past month as a dovish Federal Reserve and weak global data kept demand for bonds alive.

Jason Hunter, head of global fixed income and U.S. equity technical strategy at J.P. Morgan, expects yields to make a comeback into the summer and is finding proof in an unexpected corner of the market. "Semiconductors 12-month performance leads PMI and they stay very correlated, not just in this cycle but if you go back to the late 1990s. That relationship has been around for a long while," said Hunter."Look back at summer 2016. What you see is the semiconductors year-over-year growth bottoms out early on in the year and then PMIs bottom out a quarter later so basically lagging.

This year, the SOXX ETF's rate of change found a bottom in January before the trend turned upward. Its price moves have also outperformed the market – the SOXX ETF has surged 28% in 2019, nearly double the S&P 500.

Yes if my dog pisses more than 3 times in the backyard on a Thursday this also correlates to the bond market in the Inverted yield

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