Ain’t no inflation, today

Notable price action in overnight markets saw Bonds being bought across the duration.

U.S. Year bond yield have fallen to 1.43% (from recent 1.65%)

Japanese 10’s are 0.05%, tightening from their recent 0.08%

and a large number of U.S. banking stocks traded down for the day

and in a range which is called an outside bearish reversal day.

This is where today’s high was higher than yesterday’s and today’s low was also lower than yesterday’s and importantly today’s closing price was below yesterday’s and in fact, many closed at their lowest point of the day. 

This suggests some lower prices in the nearer-term.

It seems the market said that they aren’t buying the inflation story.

It also says that equities are deemed risker today than they were last week.

My view is that bond yields will soon rise again (i.e. bonds will be sold) and use dips in the bank stocks to accumulate.

Why ??

Because inflation is evident. You don’t need to listen to the media or the politicians.

All you need to do is read the quarterly earnings transcript of major corporations. They are telling you what is happening at the coalface.

June 11, 2021

by Rob Zdravevski

rob@karriasset.com.au