WATCH YIELDS

For the hundredth time, watch yields. We do not think it gets enough respect especially when yields keep rising not only here but around the globe. We also worry when a certain someone says he is the house. We have news for him. The bond market is the house and right now, we are seeing persistence which calls into question whether that market is finally showing a certain finger (not the index finger) at all the massive debt out there across the globe. Combine this with oil prices and simply put, a 1-2 punch.

That AI stuff. Maybe this is simplifying but would McDonalds slow down selling burgers, GM selling cars. Yes…simplifying but we have had questions for a while. Questions about massive and we mean massive debt where over $1.5 trillion is off the books and even more on the books. How the h— does any of them not only pay that back or make any money. We have questions about the market. Yes…the default swaps market worried about all their debt.

All we can tell you is AI stocks remains in a bearish phase…some better than others but everything below resistance. Some stocks down 50% and are still touted. The semis smoked yesterday right at the declining 50 day moving average indicating still on defense and in a bearish phase. The recent nascent bounce ended on the weekend news and now that it is out, the jury will be out. We are not talking bounces but wanting real improvement.

The fed tomorrow. The bond yields are not whispering to raise but yelling. We have always believed the fed should be in sync with yields, about a point below the 10 year. Currently, at 1.5 points. A little hike will not change the world but send a message that they care about what bond yields are telling them. Thank goodness the last guy is gone. Hoping for better.

New yearly lows have swamped new yearly highs. Advance/declines have been miserable… and don’t dare look what the big banks did yesterday. Always optimistic but always realistic.