A couple of themes still playing out.

In the past few days, value has taken over growth. This after a whole year of the opposite. We were sent a study that in the past few days, stocks under $5 were up 20%. When we do our scans, unbelievable moves from stocks that were at new yearly lows. Keep in mind, many have horrible earnings and sales numbers.

Bond yields continue to back up as that final move looked a wee bit climactic. As we write this, the 10 year has backed up from 1.45% to 1.84% in just over a week. Anyone who bought long in the last week or so, not happy campers.

Financials, especially the down and out regionals, are benefiting most from the higher rates as the spread widens. We have to mention JP Morgan is on the verge of breaking out to all time highs, moving out of an almost 2 year trading range. To give you an idea, JP Morgan is up 250% in the past 12 years but:

Santander: -47% BBVA: -61% ING: -66% Credit Suisse: -71% Barclays: -79% Soc Gen: -81% Deutsche Bank: -92%

The SEMICONDUCTORS remain quite strong in the face of crappy earnings and sales but the big bet is that the bottom is in for the cycle. The problem with this is these companies always say the bottom is in. Regardless, our motto is always to watch this group as it continues to lead markets up and down. It is now back near the old highs.

With rates backing up, we think the Fed no longer needs to lower rates by 1/2 point. When the 10 year was under 1.5%, they needed to catch up. No longer. Then again, anything is possible with these easy money dolts.

Speaking of easy money dolts, Draghi, on his way out of the ECB decides to lower rates again and print more money even though rates are already big time negative and even though they have already printed a ton of money. We think it was Einstein who said: “Insanity is doing the same thing over and over again and expecting different results!” Unfortunately this is going to affect the long term health of the EU as it has done nothing for no one and guarantees a burst bubble down the road. On top of that, they continue to screw their savers.

Speaking of negative rates, we wish the president would lock it up on jawboning the fed. There is a reason why other countries have negative rates. They are basket cases. Yes, with $1 trillion deficits, we are also a basket case but less so. The president needs to be very careful with his words. He railed against Obama and Bernake for their 0% rates and their printing of money. Quite interesting to see the change of stance once you are running for re-election.

Will have our thoughts on the latest debate over the weekend as we have yet to watch most of it. Somehow, we will get through the 3 hours of socialist nonsense.