April 19, 2023
Good morning,
Equity markets have been quiet so far this week. Futures are off -.60% in pre-market trading and this morning sit unchanged from Friday’s close.
In the bond market, yields have crept up over the past few days and now sit at the highest level since the SVB crisis (4.26% on the 2y, up from a low of 3.6% when SVB failed). That should not be a good thing for large cap growth stocks, and yet stocks have been largely resilient during the rate rise. It is a head-scratcher – perhaps related to all the negative positioning mentioned in Monday’s Morning Note.
It would seem that the near-term path of least resistance for yields is up as banking-sector fears ebb, with most of the banks having reported and giving the “all clear” from their respective perches.
Throw in the fact that the VIX closed yesterday with a 16-handle (16.83, a 2yr low) … these are interesting times. See you Friday.
Be well,
Mike