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Everything’s up—stocks, commodities and crypto, too—as bond yields retreat

June 15, 2021, 9:40 AM UTC

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Good morning, Bull Sheeters.

Stocks on both sides of the Atlantic are in record territory, and look to add to those gains today. As long as bond yields stay low, Wall Street contends, we’re likely to see this steady-as-she-goes rally continue.

Over in the crypto and commodities corner, Bitcoin hovers around 40K, and crude is adding to its record run. Adding to the everything’s-up observation: the dollar is climbing, too.

In today’s essay, I examine this melt-up of a markets rally, one that’s being driven higher by [checks notes] tech stocks.

But first, let’s see what else is moving the markets.

Markets update


  • The major Asia indexes are back in business today, with the Nikkei the best of the bunch, up nearly 1%.
  • The numbers in India always seem bigger. Case in point: in May, consumer prices rose 6.3%, blowing away forecasts, serving up a big test for India’s central bank amid a rough COVID year.
  • That oil rally… it continues to surge. According to the Wall Street Journal, there’s a bit of a paradox behind this bull run: that the push into green energy will create crude supply shocks. And, yep, that will ultimately push prices higher at the pump.


  • European stocks are positive out of the gates with the Stoxx Europe 600 up 0.3% in the opening minutes, before climbing.
  • Could one of the world’s most tedious subsidy battles be coming to an end? The Financial Times reports the EU and U.S. are on the brink of a deal to end the 17-year dispute over aircraft subsidies. Shares in Airbus were up nearly 1% at the open.
  • The pound sterling is flat this morning after Boris Johnson confirmed on Monday that the plan to reopen England will be pushed back by about a month. It’s a cautionary tale for countries on the forefront of the vaccination curve.


  • U.S. futures are higher again this morning. That’s after the S&P 500 closed at an all-time high for a third straight day with tech stocks leading the way.
  • Shares in Lordstown Motors plunged 19% after the CEO and CFO stepped down yesterday. That follows the bombshell revelation the SPAC-ified electric truck startup had in fact been inflating its pre-order numbers. Of course, if you’d been following short-seller activist Nathan Anderson, none of this would be news. Wait, why aren’t you following Nathan Anderson? In April, he spoke to me at length about securities fraud, SPACs—and, yes, crypto.
  • Novavax yesterday reported impressive trial results for its COVID-19 vaccine. Shares fell nearly 1%, but are ticking higher in pre-market this morning.


  • Gold is higher, trading around $1,870/ounce.
  • The dollar is, wait!, it’s up too?
  • Crude continues its impressive run with Brent trading above $73/barrel.
  • Bitcoin is trading above $40,000.



Stocks are on a winning streak—a pretty dull one. The S&P 500 has closed at a fresh record high each of the past three days. The Nasdaq joined it there yesterday.

This rally has all the hallmarks of a classic melt-up. The benchmark S&P is more meandering than climbing. You could say that’s to be expected on the eve of Jerome Powell’s big presser tomorrow, in which we hope to get some indication on where the central bank stands on inflation and rates. After all, nobody wants to make any big bets until then.

Still, there’s something puzzling about this run we’re on. You have to go to the fixed-income side of the market to spot it. Yep, I’m referring to bonds. The 10-year Treasury note dipped earlier this week below 1.50%, down more than 25 basis points since March.

JPMorgan Chase strategists, for one, are warning we shouldn’t read too much into that. No, they say, the falling yields do not mean the inflation storm clouds will blow out of town any time soon.

Apparently, tech bulls didn’t get that message. They have once again piled into tech stocks as bond yields retreat. That may explain the Nasdaq’s recent return to record territory.

Remember: low-profit, high-growth tech stocks are viewed as particularly vulnerable to rising prices. And the data is sending clear warning signals: we’re in the middle of one of the most inflationary runs since World War II. But at the same time, yields are falling.

Yeah, I know. Strange.

I’ve read a lot of markets data in recent months. I don’t recall anybody forecasting that a surge in prices would lead to a rally in bonds, that would then kick off a mini bull run in tech stocks.

I’m not going to try to explain how we go from 8.3% inflation rate (see chart above) to an everthing’s-great rally.

But I will leave you with this nugget, which stood out from a recent BofA Securities report on the markets:

Heard on the Street: Nobody knows how to trade inflation, everybody knows how to trade “don’t fight the Fed.”



A little followup to yesterday’s Postscript. After I sent the Bull Sheet out yesterday morning, I put on a clean, pressed shirt and Zoomed with the good people of Kolwezi, DR Congo. Joining us was a fabulous panel of experts from Amnesty International, the OECD, and Bon Pasteur Kolwezi.

They spoke candidly about the planet’s perilously broken supply chain of precious metals. Why broken? Because there are still many children toiling in the mines, risking so much to get these minerals to the global market, which then go into our laptops and car batteries.

As promised, I’m sharing the link to the recorded webinar here. I know everyone is really busy, but if you have a few minutes to spare today, I recommend you watch the brief testimonial from Mary. Some 63 million girls worldwide are caught in the trap of child labor. But not Mary! She used to work in the copper and cobalt mines, doing back-breaking work for pennies a day. But not anymore.

Today, Mary is in school. She’s studying hard. She has big dreams. Like any other 15-year-old.

You can pick up her story at about the 7-minute mark.

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's reads

The million-dollar tweet. When Elon Musk tweeted over the weekend that Tesla would consider taking Bitcoin in payment for its EVs, the cryptocurrency soared, and garnered Tesla itself a huge windfall. How big? Fortune's Shawn Tully calculates a cool $143 million

Trading warning. Jamie Dimon surprised the markets yesterday when he warned that JPMorgan Chase's trading revenue would be way softer than expected. That's a sign that the rah-rah pandemic-era trading boom is peaking.

Impenetrable. One of the hottest commodities of the past year is good old steel with the the NYSE Arca Steel Index up more than 35% this year. Yesterday may have been a rough session for the metals in general, but UBS is still bullish on steel with prices expected to rally well into 2022, they say. 

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A cocktail of ingredients is sending house prices to unprecedented levels worldwide.

That's Bloomberg economist Niraj Shah who warns that rock-bottom interest rates, trillions in fiscal stimulus, lockdown savings, plus a constrained supply of homes matched with big hopes for a stellar recovery are fueling a global bubble in housing prices.

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