The Bond Market Has Priced-in "Higher For Longer"...The Stock Market Has Not.
Quick Note…..I will be traveling each of the next two weekends. (The first trip will be to visit my father on what would have been my mother’s 94th birthday. The second trip, to attend an engagement party for my nephew and his fiancé.) Therefore, I will be sending out an abbreviated edition of the Weekend Report on each of the next two Thursdays. (Next week, it will come Thursday morning…and the following week, it will come Thursday evening.) The regular daily comments will be published each day over the next two weeks…except on the two Fridays……….Thank you very much.
Table of Contents:
1) The process has begun to resolve the BIG divergence between the bond & stock market that developed this year.
2) Interest rates/bond yields will remain higher compared to recent history…even when after the Fed next cuts rates.
3) Updating the charts on the major averages. They’re all very close to confirm a change in their intermediate-term trends.
4) The tech ETF’s have broken their key short-term support levels…and they’re not remotely oversold on their intermediate charts.
5) On the technical side of things, long-term Treasury yields are really not very overbought yet.
6) The bank stocks are cheap, but they still look lousy on the charts. (BTW, what’s wrong with BAC?)
7) Weaker Existing Home Sales…& weakness in the ITB…raises some questions about the home construction stocks.
8) The high yield market continues to hold up well, but it is starting to see some mild cracks.
9) Looking at the charts on Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT) and Meta (META).
10) Summary of our current stance.