From last night’s Bedtime with BTIG note, Dan Greenhaus (@danBTIG on Twitter) points to the below chart as something that’s of increasing concern to investors:
It’s all interest rates all the time it seems. For the week, the bond market was thunderstruck as the 10 year yield rose by roughly 40 bps, one of the largest yield increases in a decade. But such an increase is not exclusive to this past week; the 10 year yield was higher in seven of the last eight weeks. What has elicited a fair bit of conversation has been not the increase but the decrease in inflation expectations. Given their relationship to stock prices (see chart below), we think this conversation is warranted. For their part, stocks dropped for the fourth time in the last five weeks although as has been repeatedly noted, the cumulative drop is a relatively tame 5%.
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