
Inside Markets — Bond Yield Outlook
We look for 2-year yields to migrate to the 3.84% level in the near-term before testing critical long-term support at 3.52% in the months ahead.
We look for 2-year yields to migrate to the 3.84% level in the near-term before testing critical long-term support at 3.52% in the months ahead.
The tactically bullish outlook stays intact as long as macro data remains resilient, earnings growth is positive and trade rhetoric improves.
We’ll see the first of the Mag 7 reports this afternoon with GOOGL and TSLA due after the close.
The crowded positioning we see in high beta and momentum factors has largely been driven by retail investor flows.
The near-term technical backdrop remains favorable given lower implied volatility, ongoing systematic demand and a reopening corporate buyback window.
Q2 earnings season is off to a strong start, particularly for airlines and banks that see solid growth after a peak in macro/policy uncertainty.
Our tactically bullish fundamental outlook requires economic resilience, earnings growth and improved trade rhetoric.
The pullback in bank stocks and poor market internals (SPX -1.4% yesterday) are near-term dynamics caused by the repricing of Fed rate expectations.
: Large cap diversified banks always kick off earnings season, and the market reaction to good/bad results often sets the tone for the quarter.
In our opinion, the catalyst for the momentum factor unwind over the last two weeks is de-risking into CPI and earnings season and not a reaction to trade policy.