Stocks fell because yields rose and oil rose. Then yields fell a bit and oil fell a bit and stocks fell less. This passed for a reprieve.
The bar sits so low now that not getting kicked in the teeth as hard counts as good news. Markets spent the week discovering that when the things making them go down stop making them go down as much, they go down less. Groundbreaking stuff. Someone alert the chartered financial analysts.
Higher yields mean bonds pay more which means stocks become less attractive by comparison because why would you buy something volatile when you can buy something boring that pays you to own it. Higher oil means companies pay more to make things and ship things and people pay more to drive to their jobs they hate. Both make stocks worth less. This is not complicated.
But Wall Street got a taste this week. A taste of what exactly? A taste of yields and oil not climbing straight up like they're late for a meeting? A taste of Wednesday feeling slightly less catastrophic than Tuesday? The phrasing suggests they sampled some rare delicacy instead of just witnessing numbers move in a different direction for thirty-six hours.
Retail traders saw the reprieve and bought calls. They always do. They watched stocks drop four percent over two weeks, saw a single green day, and concluded the bottom was in. The bottom was not in. The bottom is never in when you think it is. The bottom only reveals itself six months later when you check your account statement and wonder why you didn't just buy a boat.
What's ahead? More of the same. Yields will thrall. Oil will thrall. Stocks will do whatever they were going to do anyway while CNBC acts like the movement validates their previous seventeen contradictory takes.
The market doesn't care about your taste of reprieve.
Photo by Richard Bell on Unsplash
Leave a Comment