We’re down a staggering 6bps to 2.267% on the 10 yr, people. We’re in full crisis mode in fixed income, yet stocks are devoid of any sense of fear and cannot recognize danger.
It gets boring telling you what markets ‘should be doing’, when that’s meaningless nonsense. The only thing that matters is what’s actually happening.
So what is happening?
Breadth is at 50% today — but SAAS stocks are +1.6% — led by PLAN and AYX. Semis are weak again and INTC looks like it wants to go to zero. Oil stocks are incredibly weak and, overall, I want to believe stocks are about to break lower. But, truthfully, there is nothing in this tape, aside from bond yields crashing, that would lead me to believe we’re in any real danger, sadly. My Bubble Basket is higher by 1.6% today — hardly the harbinger of doom that I was looking for.
Until we get a break in something, I’ll keep wish casting for a COLLAPSE and hope to god and the heavens we’ll land ourselves into an apocalyptic environ where stocks cannot withstand the selling.
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Funny thing about SaaS names is that not only are they one of the few areas of durable growth.. but they also have no China exposure. On down days you can see the rotation into these names and out of Semis, over and over. The thing that will probably end the run is actually improvement in economic conditions where money flows out of these names and back into high beta Semi / Material / Industrial names
Stocks not dropping when they should is bullish