Bond market NOT buyin' it ...
From Bloomberg’s Cormac Mullen earlier on this morning (just after 1a) with a recap of recent equity euphoria (relief) and the bond markets underwhelming ‘selloff’ in repsonse. Here are Five Things You Need to Know to Start Your Day
Still Supportive, Less Immunity, Stocks Roar, Two Hours and what is Coming Up…
… And finally, here’s what Cormac is interested in this morning
It seems no amount of equity exuberance is going to convince the bond market pessimists. Despite Tuesday's supercharged U.S. rebound -- the biggest surge for the S&P 500 since March -- the Treasury yield curve resolutely refused to steepen. The spread between five-year and 30-year bonds dipped once again and remains just off the flattest since March 2020. That's a signal that bond traders continue to worry about the U.S. economic outlook and in particular the prospect of Federal Reserve rate hikes ruining the recovery. One could also argue it's a sign to stock investors that the recent rebound is just froth but they haven't really been listening to the bond market all year and are unlikely to start now. The reaction to the latest omicron news flow has been relatively positive and the U.S. debt ceiling deal will help investor sentiment. But it's premature to suggest risk assets will have a smooth ride from here to the end of the year.