Morning Notes — Inflation Expectations and the SPX

Ten year inflation breakeven yields have moved sharply lower since crossing below technical support at 280bp.  Now at 233bp, ten-year breakeven yields and elevated nominal yields (10-year at 3%) have driven 10-year real yields to 0.66 from 0.89 in mid-June.  The decline in real yields has led to some modest outperformance in Tech over the last 3 weeks.  That outperformance should start to accelerate once 10-year real yields move below 0.36.