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The Monday Morning Playbook: Week of January 16, 2024

Short-term caution is warranted

Good morning,

Last week, I called out the ongoing correlation between stocks and bonds and highlighted 4.09% as a key level to watch on the 10-year yield. I felt optimistic stocks could rally if we stayed under there.

Well, 4.09% acted as resistance following Thursday’s supposedly “hot” CPI report and yields rolled over. The S&P 500 also rallied more than 1% last week to within striking distance of its all-time high.

So it’s all good, right?

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Authors
Scott Brown, CMT