The S&P 500 closed at its first record since August on Tuesday, led by software and AI megacaps. Meanwhile, the 10Y closed Monday at 5.31%, its highest close since 2002, and the 30Y is at 5.71% this morning.
Breadth has not followed the index. Only about 28% of S&P 500 stocks are above their 50-day moving average, so a narrow group is carrying the index's new all-time high.
What concerns my discretionary bias is the long end levels going into today's FOMC minutes and 10Y auction. Tuesday's 3Y auction saw soft foreign demand, and another weak auction would put the bond market back in charge. Houthi attacks on Saudi energy sites have also pushed WTI above $90 and Brent above $101 this morning.
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Disclaimer
This newsletter is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities.
Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.