Gap up yesterday…gap down today…with markets remaining…yes, hate the word…range-bound! It ‘s not our fault. We have nothing to do with it. When things change, we will let you know. Eventually, the major indices will show their hand but with half the market fighting against the other half, it is tough to make hay. Maybe the fake employment number will do the trick.
The one thing we want to reiterate to you is the continued breakdown in the bond market. Not only are we seeing int in the governments, we are seeing it in the corporates. As you know, we think the high yield end is about as mispriced an asset as we have seen in a long time. Keep in mind, yields are still very low versus history. But that is not market-based. It is based on the trillions printed by central banks. In addition, because of the back-up in rates, interest rate-sensitive stuff continues to act bearishly, namely utilities and real estate. We continue to tell you to avoid.
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