Rate spike should prove short-lived into CPI release next week Array ( [cookie] => cc7da3-396ed3-9470e8-d09e9a-23947d [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 571364 [reason] => [method] => ) 1
S&P and QQQ are now back to new all-time highs quickly as US Treasury yields have begun their descent. This won’t prove to be a straight shot for either asset class in my view, as the broader market has not yet begun to participate, and some signs of negative momentum divergence remain present. However, a stair-stepping rally makes sense for Equities as Treasuries seem to have shown their hand this week, and June seasonality in Election years remains positive. Overall, a bullish stance remains correct, but with close eyes on other sectors starting to kick into gear in the weeks to come.
Looking back over the past few weeks, this choppy market has proven to be unsettling for Bulls and Bears alike lately, but some consolidation following steep runups are typically common, and can provide opportunity. However, it’s fair to say that the Equity market landscape since late March has been a lot more challenging than the period from last October 2023 into this past March 2024.
Friday’s violent spike in yields failed to derail the Treasury rally that looks to have gotten underway this past week. Both US Dollar and Yields looked to have tipped their hand, and generally should begin trending steadily lower in the weeks and months to come.
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