Click HERE to access the FSInsight COVID-19 Daily Chartbook.

We are shifting to a 4-day a week publication schedule:

  • Monday
  • Tuesday
  • Wednesday
  • Friday
STRATEGY: Equity markets "de-equitize" faster in 2021 = upside + $3.2T dry powderThere are central views about markets and among the most accepted of these is that underlying inflationary conditions are going to "surprise" markets and the Fed is already behind the ball.  I don't personally have a view on this but at the extremes, inflation is indeed a headwind for markets.  That is, too much inflation is bad for equities just as much as too little inflation is bad for stocks.But the best contemporaneous gauge is looking at the absolute level of the US 10-yr.  Sure, other measures are useful such as inflation breakevens, etc., but the US 10-yr is going to reflect the market's fears about inflation.  Think about it:or- if deflation was a risk, rates would be plunging- if inflation was a risk, rates would be risingLooking at the recent trend in rates, it seems like interest rates are actually trending lower.  Take a look below.  - the 10-yr was nearly 1.8% in early March- it has made lower highs since- it is currently 1.5687%There are many ways to interpret this, but to me, one takeaway is the bond market is s...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

More from the author

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free