Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Mixed messages. US equities climbed steadily from the late morning through the close. There’s no significant news event to explain the day’s bullish move and the capital flow was light (87%).
So why did the tape climb significantly? I don’t know and it’s even some speculations aren’t clear to me. We’re knee-deep in markets telling us different things and today’s just the latest example. It’s getting to the point where it’s no longer a curiosity. The stock and bond markets are sending us mixed messages lately.
Here’s the last 6 days of the S&P and the yield of the US 10-year bond.
US 10-year yield
Higher rates and higher stocks. It can’t continue forever. Usually stocks are the last to figure things out but maybe they know something bonds don’t know? Maybe bonds are too worried about the Fed? Maybe stocks are impervious to climbing interest rates?
I have more questions than answers. I don’t trust this equity rally. I don’t want to fight it but no way am I joining it either.
See you tomorrow,