Kelly Evans: Everything’s falling

Kelly Evans: Everything’s falling

The Dow's down 800 points, the 10-year yield is now below 1.2%, Bitcoin is down $900, and energy is getting shellacked. My own personal hypothesis is that this is capitulation--of the inflation trade. Energy being the last shoe to drop, after OPEC+ decided to boost output. Gasoline futures are down 5% (hurray!). Oddly, I'm even more persuaded by of things today. Because even in a growth slowdown, 1.2% on the 10-year is too low. I just don't think it meaningfully conveys economic information anymore. I don't even care why it's so low anymore. It just is until it isn't. I mean Germany's 10-year yield is back to -0.4%. It's all just ridiculous. Is this a Covid selloff? Maybe, but people in markets have been talking about the Delta variant for two months now. And you've got the Bill Ackmans of the world saying its spread could actually help hasten the pandemic's end, because it means people will either get Covid or get vaccinated, and either way they'll have antibodies. All the reopening stocks are down and the shutdown stocks are back up today, but I'm not buying it. Public schools will be open--they can't afford not to be