Let’s talk bonds. Everyone else is.
An astute reader alerted me to the fact that PBS led off the evening news on Monday with a story on interest rates. I woke up on Tuesday morning to see that the Wall Street Journal’s front page had not only a story on interest rates but a chart too! I know the Journal likes charts, but typically not on their front page!
Then I noticed late in the day on Tuesday, even the New York Times thought interest rates were important enough of a story to slap a front page—above the fold—story, and yes, with a chart, on interest rates.
But do not worry, a top Wall Street strategist says the bond vigilantes will stay away. I figure he is like most Wall Street folks, believing interest rates don’t matter until they do, or until rates smack around their beloved stocks. Because it is always that way.
Folks think just because the stock market hasn’t noticed or reacted to it, it doesn’t matter. Then one day, the market wakes up and, for whatever reason, that’s all it can think about. And that’s when it matters. That’s what I call a Realization Day. A Realization Day is one of those days when everyone finally realizes why stocks (or bonds) are doing what they are doing.
In the meantime, take a look at the chart of the yield on the Ten-Year. It’s pretty much the same place it was three weeks ago. You remember three weeks ago, don’t you? Semiconductor stocks were melting down, and folks were selling SMH like it had cooties. You remember that massive volume in SMH, don’t you? No one fretted over rates then.
So, for all the hoopla, rates haven’t really budged.
I would love to see one more whack in the bonds (rates up) just to get the Daily Sentiment Index (DSI) down under 15, but as I have been saying, I think we’re getting close. I just always prefer a bit of hysteria. We have hysteria from the news outlets, but some hysteria from stock folks tends to seal the deal for me.
Away from that, the number of stocks making new lows expanded once again on the NYSE. They are now closing in on readings not seen since the March lows, as new lows clock in at 175.
I want to end with a comment about the Either/Or Market. I have been on this train for what seems like forever. If the semis rally, they do so at the expense of everything else. And vice versa. In the last few days, I have seen many begin to talk about this either/or-ness (how they have missed it baffles me!). In fact, it’s almost as if we’re in the midst of a Realization Day(s) that we have an Either/Or Market. Typically, once the masses ‘realize’ it, the market changes things up.
It wouldn’t surprise me if the market decided to have an ‘everything’ day or two within the next week. My guess is most do not expect it.
