Investors Grapple With Yields Like a Fish Grapples With a Bicycle

Stock futures are flat. Treasury yields are higher. The Fed will release minutes later this week. None of this information helps you.

The article says investors are "grappling" with yields. Grappling implies a struggle between two forces of roughly equal strength. Treasury yields do not grapple back. They move up or down based on supply and demand dynamics you have no control over. You are not grappling with anything. You are refreshing your brokerage app and pretending the candlesticks whisper secrets.

Jobs report came in weak. This apparently eased concerns about another rate hike. So bad news is good news until it becomes bad news again. The market celebrated economic weakness because it might prevent the Federal Reserve from making borrowing more expensive. Nothing says healthy investment thesis like cheering for layoffs because your tech stocks might go up three percent.

Fed minutes arrive Wednesday. Thousands of retail traders will read a document written by committee three weeks ago and believe it contains actionable intelligence. It does not. The minutes describe what officials already did and thought when they did it. You are reading the diary of someone who already made their decision. This is the financial equivalent of studying game film after the Super Bowl ended and thinking you can still affect the outcome.

Stock futures are flat because nothing happened. The headline could have been four words. "Nothing Happened Today Either." But that would not generate clicks from people convinced that monitoring pre-market futures at 6:47 AM constitutes research.

Treasury yields surged last week. They will surge again or they will not. The chart will move right regardless of whether you watched it. Your conviction that this time you have figured out the pattern is the same conviction you had four months ago before you lost eighteen percent on those puts.

Photo by Maxim Hopman on Unsplash