Market On Open, Monday 25 November
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Talking Turkey
by Alex King, CEO, Cestrian Capital Research, Inc
Thanksgiving week is typically bullish on a seasonality basis alone, and I am not sure there is any particular reason to believe the typical pattern won't play out in equities. More interesting to me at the moment is the direction of travel in US government bonds. The narrative says that bonds should fall, since the incoming Administration has an inflationary policy agenda (tariffs will raise product prices; reduction in labor force will increase labor costs). Inflation rising, risk to the Fed's planned rate cuts resulting in, ultimately, another rate-hike cycle, bad for bonds. Easy, right? Except that the 10yr yield looks to be topping, and $TLT looks to be bottoming. We can usually count on large liquid security markets to portend changes in the real world. So if bonds are set to rise one has to ask oneself - why? And I don't know the answer to that yet. But I have learned that charts are a more reliable predictor of reality than is the narrative, so I am watching the yield and TLT charts very closely. I added to my $TMF holdings today, as disclosed in advance to our Inner Circle subscribers.
For now let's check in on where markets stand.
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