US stocks rallied overnight with the S&P500 finishing up +0.8%, even as bond yields nudged ever higher i.e. the market is gaining strength in our opinion when the S&P500 can make reasonable gains even when the US 2-year yields test 4.95%. Equities appeared to gain in confidence following comments from Atlanta Fed member Raphael Bostic that the central bank could be in a position to pause rate hikes sometime this summer although yields remained strong so his influence was certainly only marginal – sentiment clearly turned after he spoke with the NASDAQ rallying +0.9% after being down before his ray of hope was released!
- We believe tech stocks are holding up well with the longer-dated US 10’s trading above 4% but it’s a huge ask for them to rally while bonds remain weak (yields strong).
MM remains cautiously bullish on US equities through March
Add To Hit List
Strong economic data is continuing to weigh on bond prices (yields higher) but longer-dated yields remain well below levels reached last October due to looming future recession worries.
- We don’t believe US longer-dated yields will break clear of 4% as fear of a recession looms into 2024 – they’re ignoring us at present!
MM is neutral-bearish on the US yields short-term around 4%
Add To Hit List
