The livestream yesterday broke down WHY the bond market keeps crashing while stocks sit at all time highs, and HOW the structural forces behind higher interest rates are breaking the biases the entire financial industry was built on.
Main takeaways from the macro playbook section:
From 1988 through 2020 interest rates only moved down, and that single trend hardwired the biases behind the 30 year mortgage refi playbook, the 60/40 portfolio, and the entire asset management industry. Since 2020 that regime is over, and anyone running a strategy that only works when rates fall has a hope, not a plan.
The covariance between the S&P 500, the 30 year rate, and the dollar is the framework for reading this market. The largest moves of every macro cycle, melt ups and meltdowns alike, occur when all three assets move in lockstep, and 30 year yields pushing back toward all time highs is exactly WHERE to watch that alignment forming.
While everyone argues over a September hold versus hike, only about 42 basis points of hikes are priced into the terminal rate through 2027 as the long end bear steepens. A long end that bear steepens through a Fed debate is telling you nominal GDP is running hotter than consensus believes.
Inflation retraced its entire spike, yet bonds never caught a bid, and that answers the whole question of WHY this is still a bear market. Crude holding its levels, corn and wheat bid, copper elevated, and a stagflation reading in the short term macro impulse all say the pressure on bonds is structural, not cyclical.
Financials, the sector most sensitive to delinquencies, are rallying as rates rise, and the 10s30s curve is bear steepening, which does not happen in a collapsing economy. The data says the system can withstand higher rates, so the "rates up means everything breaks" view has no support.
Money market funds paying 3 percent are not a safe harbor, because purchasing power erodes whenever growth accelerates, even with inflation flat. Real rates versus inflation expectations is the decomposition that tells you WHAT is actually driving rates, and in a world changing this fast, not taking risk is what gets punished.
You can find the free recording on the Bond Market Playbook here in the YouTube video:
The member section connects this framework to the live regime and positioning, with the recording linked at the bottom of this report.
Monday's stream takes on WHY trading macro flows is the most important thing to understand in a world where disruption and fundamental change are constant. It will map HOW the entire Capital Flows process is built around that reality, from regime identification to attribution to live positioning.
Paid subscribers can join the livestream with this link (the first half will be free and streamed to Twitter and YouTube, where the second half will only be available on Substack for paid subscribers):
