“I used to think that if there was reincarnation, I wanted to come back as the president or the pope. But now I want to come back as the bond market. You can intimidate everybody.”
— James Carville
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Early, short note …
The focus continues to be on bonds, as the US Long Bond yield hit a 24-year high:
24-years ago the second part of Lord of the Rings: The Two Towers came to cinemas. And Star Wars: Episode II – Attack of the Clones. And Ice Age. Eminem’s “Lose Yourself” was number one. As were Kylie Minogue’s “Can't Get You Out of My Head” and Enrique Inglesias’ “Hero”.
Only two of my four adult children were born at the time.
You get the point - it’s been a while.
It is maybe therefore even more astonishing how resilient (or ignorant?) the equity market has been.
Whilst the S&P 500 closed down, it is really “hangin’ on in there”, less than 2% from a new ATH:
But don’t be fooled. We need the bond market to stop its bleeding at least temporarily for equities to continue higher or, worse, avoid the meltdown we (I) have “planned” for next year …
Today is the first of three consecutive days of important economic data in the US (see table below), which could bring some relieve … or not … ADP Employment numbers, PCE, GDP are just a few of a heap of numbers, followed by ISM readings tomorrow and BLS employment data Friday.
Stay tuned, and, May the Trend be With you!
André
Today’s chart is probably not helpful to make you more cheerful about the future of the equity market, but, as they say, it is what it is …
Everything in this document is for educational purposes only (FEPO)
Nothing in this document should be considered investment advice
Investing real money can be costly; don’t do stupid shit
Leave politics at the door—markets don’t care.
Past performance is hopefully no indication of future performance
The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG