Bond, Yield, Stock, Stock market, Inflation Treasury yields rise, adding to fears of potential inflation

You got double b’s uh below three uh that leads nat alliance this morning to suggest that maybe that provides some uh signs of stabilization on the ten year, maybe below they say one. Three six we’ll see yeah, i mean we hit 133 somewhere in there uh. Quite a move in yield in a very short amount of time, and you know that you’re starting to hear that more often, at least in the conversations that i’m having the idea of our yields, um done moving lower in any way are they going to continue to Move higher are we going to see the uh the curve itself, steepen to some extent um? You know you’ve got, as you pointed out, carl some fairly strong numbers in terms of parts of the economy right now, despite what’s going on uh in in texas and some of those other states, you’ve also got the prospect of 1.9 trillion dollars coming into this economy. Pretty soon and the checks that go along with that and you referenced goldman sachs’s work in terms of how much of that will be saved and how much will be spent and how much already has been saved and how much will find its way potentially into places. Like robinhood accounts and the stock market, but mike i don’t know if you hear it more often, but i certainly do at least that question of. Could there really one day actually be a return of inflation? Are we already pouring fuel on a pretty hot fire to begin with uh, given people are getting back to sort of life a lot of the country already is, but that return to normalcy, the spending that will come along with that and then 1.

9 trillion dollars. On top of that, and by the way, potentially an infrastructure bill, following on that, you know the idea that there won’t ever be inflation. I guess a lot of us kind of these last 20 years, whatever it’s been you’ve, grown up with that idea, but the yields are starting to show a little something different, not to mention, of course, that desire from anybody anywhere to buy anything that’s got some sort Of an interesting yield on it, yeah there’s, no doubt i think everybody expects i mean just the math was going to get you a little bit of a burst in uh in inflation, at least on a reported basis over the next few months, because we did, we Are going to anniversary the crash, so everyone’s been bracing for this sort of statistical cosmetic, uh inflation uh, you know outburst so to speak, but people were gon na say you have to look through it. Uh it’s, really not gon na, be something that’s. A new trend and the fed, of course, is trying to engineer inflation and has been trying to prepare investors for the idea that they are going to be tolerant of significantly higher inflation for some time to come. To. Essentially counterbalance all this time, we’ve spent under their target of two percent right, so that’s been the the playing field. I think right now you are have to wonder about you know the retail sales number in january. Everything is is running a little bit better than expected on the consumer spending side, and then you know even on the inflation side so far, and you look at the bond market right now.

All it’s doing is kind of normalizing rates. You know if we were right now and a half a year ago, but mike what, if you had a real curve. What if you actually got back to one that you and i made? We do – have a real car, because we were at a percent and a half on the 10 year a year ago and the fed funds rate was at a percent and a half right. So you know it’s starting to become a real curve. What’S interesting to me is if you look at things like the five year. You know that was at you know, 35 basis points six weeks ago, now it’s pushing 60 right, not a big move, not high rates but it’s, showing you that the market is unable to ignore the idea that the fed may have to respond by the way. What is this, what does the retail sales number do to that 1.9 trillion dollars? Everybody’S expecting are people going to say, hey we’re at 6.3 unemployment, everything’s moving fast we’re reopening? Do we need that much it doesn’t seem to be stopping it. I mean that seems to be moving along, but you know my question to you, then would be all right if we get back to rates that perhaps we are accustomed to, but perhaps some other uh market uh players or not. What does it mean for growth stocks? Yeah, i mean i’m looking at this goldman sachs note on palantir this morning, right they upgrade it to a buy because it’s growing at about 30 plus – and they say that – deserves a 44 multiple on calendar year 21 sales.

But what happens in a an environment where we get two percent of the 10 year to to grow stocks like that or higher and a real curve right, no well what’s interesting about that is the pre earnings or i guess pallent are technically not pre earnings. But if you’re basing it on on top line, i don’t even think it matters as much for that i’m, looking more at apple, which has bond like characteristics in terms of its cash flow stream.

What do you think?

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