It’s the final month of the year… whew, where did the time go? Funny thing is, science tells us that you aren’t just imagining it… time is indeed passing faster, not physically, but relatively. Why? If you think back to childhood, we were hyper-focused on the present moment. With every event seeming like the MAIN event, time felt slower. Today, as adults, we are instead focused on what’s happening beyond this moment, often multitasking, planning, and constantly thinking ahead. Nowadays, the present is far more fleeting and quickly obsolete…
…And so it is with the markets.
If only we could have slowed down the clock to embrace the 3% yield for a few moments longer. We were suddenly woken up from our holiday food comas to find the 10-year Treasury trading higher at 4.10% this morning. The catalyst began overseas as the market focused on the Bank of Japan’s hawkish comments, which caused JGB yields to climb. Further adding to the pressure was a fresh supply of corporate debt hitting the tape. Lower Bitcoin prices didn’t seem to help (selling begets selling).
Given that markets are always looking ahead, we are reminded that we also have a slew of economic data headed our way in the form of ADP employment (Wednesday) and PCE inflation (Friday). This marks another checkpoint to trade the Fed’s playbook (currently priced at a 95% chance they will cut).
If you want to know where my head’s at, I’d say there is no better time than the present to shore up some pipeline risk.