• 4.5's UNCHANGED at 100-07+
  • 10yr Note UNCHANGED at 3.801
  • Stocks moderately better, but futures ticking up noticeably on Apple earnings.
  • Does it change the outlook for tomorrow?  Maybe... 
  • Caveats to follow...

 

Today was pretty brutal in that "sideways" kind of way where the charts don't really say much.  In fact, they just say "NO TREND." (by the way the treasury chart has yesterday's highest yield the same as today's lowest yield, yet close to close, yields were unchanged)

With bond markets not telling us really anything at all, and with no data on the calendar save for weekly MBA applications, how reliable of an indicator will the stock lever be?  And what's going on over there with Apples big "beat" after the bell (meaning their earnings topped estimates after the stock market close).

Take a look at this chart which shows the S&P in green and S&P futures in teal to see that "after the bell" effect...

That's not an insignificant move up, but the night is young and no guarantee of where things will be at the US start tomorrow.  Still...  with a company like apple, and other earnings buzz, it's always possible stocks will rally into new highs tomorrow.  And if those highs are higher 1213, they'd be the highest since 2008. 

And though I'd like to argue that the bond market is able to play it's own game in the face of stock gains (which it has done quite a bit in 09, 10), I'm always fearful of the situations where stocks are pushing into fresh multi-year highs.  Without potential stock lever considerations, it would likely be another sideways day for bonds.  But with them, the uncertainty is back.

More important in the scope of this week would be Thursday and Friday when some real data starts to hit.  Even if bonds have to concede a bit tomorrow, bigger moves are much more possible on those days.  Yields didn't show much willingness to cut a wide range today, so although a boomy stock market could lead rates higher, again, the cost of admission might be minimal for those feeling like taking the risk.  The bigger risk is that Thursday's data would bolster a hypothetical stock rally, in which case, well...  that wouldn't be good for floaters.

On the other hand, if stocks rally toward something like 1213 in the S&P, and fail to break through, that would be a huge technical reversal sign.  And even if we all know stocks will never stop rallying, a bump at 1213 could be more than enough to benefit rates in the short to medium term. 

Bottom line: no reason to assume the sky is falling,  but plenty of "what if's" to stay as safe as you need to stay.