Big Week For “Mega-Caps” Called Into Question As Apple, Microsoft Fall Overnight

Big Week For “Mega-Caps” Called Into Question As Apple, Microsoft Fall Overnight

The "check engine" light flashed on the rally's instrument panel this morning. That little oil can icon looks to be glowing as well. A wave of selling hit the market overnight amid fears that falling yields could suggest economic slowing. This followed a downturn in European and Asian stocks and another leg downward in crude, which is now off more than $5 a barrel from the six-year high it posted earlier this week. The benchmark U. S. 10-year Treasury yield fell to 1. 26% this morning, the weakest level since Feb. 18. European and Japanese bond yields fell, too. The U. S. 10-year yield has been falling steadily since topping near 1. 78% in March, but things have really accelerated the last few weeks. They say bonds move first, and that's definitely the case this time. A few months ago, it looked like we were on the road to 2% or higher as inflation ramped up, but now the question is whether we'll see a 1% yield again before we get to 2%. If inflation isn't an issue, then perhaps the economy isn't growing as quickly now as it had been back in April and May when inflation ramped up.