S&P 500 futures are up 0.2% so far today as tech shares are once again leading the way. Nasdaq futures are marked up by 0.6% currently as we move towards European trading. For the S&P 500, the slight gains are coming after a record high close on Friday last week at 4,839.81. It is now roughly 18% above the October low near the 4,100 mark but are we really talking about entering a bull market here?
While there is much optimism, I think the bond market still has a say in all of this. 10-year yields in the US might be slightly down again today to 4.11% but it is still keeping above the 200-day moving average of 4.09% for now. I would argue that remains a key technical development for broader markets in general.
With yields up by some 25 bps since the start of the year and traders now seeing just ~46% of a March rate cut by the Fed, should the mood in equities be this buoyant? There is the saying in markets that the bond market is always right. So, equities may have brushed off a poor start to the year to climb to fresh highs. However, that is not to say that there is no risk of the punch bowl being taken away all of a sudden at this party.