April's Fools
Updated
If you think the bond threat is over; it's not. It's you think the chopping is done; it ain't.
It's puzzling to me that the bond market hears another 2 trillion is going out the door and it's complacent with that. I guess because it's all "paid for" by 2 trillion in taxes over 15 years (it won't be). Meanwhile, the market hears that corporate taxes are going up and decides that it's time to celebrate.
Only one of these things can be true. And either the market is watching bond yields too closely so as not to notice taxes, or envisioning what 2 trillion in infrastructure money looks like and deciding that it can compensate for the tax increase somewhere down the road.
It wasn't just that the market blazed ahead without really digesting the new possibilities. It's that it saw a rotation back into the same old tech plays and memery that everyone rotated out of. huh.
Anyways, Gold GLD is looking pretty good, Retail Trade is looking overbought, and Consumer Staples is looking weak in the face of tech resurgence.
It's puzzling to me that the bond market hears another 2 trillion is going out the door and it's complacent with that. I guess because it's all "paid for" by 2 trillion in taxes over 15 years (it won't be). Meanwhile, the market hears that corporate taxes are going up and decides that it's time to celebrate.
Only one of these things can be true. And either the market is watching bond yields too closely so as not to notice taxes, or envisioning what 2 trillion in infrastructure money looks like and deciding that it can compensate for the tax increase somewhere down the road.
It wasn't just that the market blazed ahead without really digesting the new possibilities. It's that it saw a rotation back into the same old tech plays and memery that everyone rotated out of. huh.
Anyways, Gold GLD is looking pretty good, Retail Trade is looking overbought, and Consumer Staples is looking weak in the face of tech resurgence.
Note
What do they say about March? 'In like a lion out like a jackass.'Did I get that right?
Note
And bond yields are already continuing their march up. Any thoughts about FED tapering their purchases are probably premature. The amount of people seeking employment is much lower than the number of people who have lost their jobs. The FED doesn't really remark upon the unemployment rate, but rather the number of payroll jobs that are missing; The infamous 10 million. The fact that we added a million back doesn't speak for much. As we run out of jobs that can be 'restored' and into jobs that have to be founded or recreated, slowing down further progress. Bond purchases will continue until inflation is sustained above 2% and on track to reach 3% unless tapering is implemented. That's the FED's policy.Expect an economic boom with suppressed interest rates for the next 12-18 months. After that we'll probably head towards a recession, but who knows?
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