The correlation between the bond and stock market is at 0.73 right now, which is the highest level since the 1970s, and this could drive volatility higher and stocks lower.
The long bond (TLT) is putting pressure on stocks, which are down slightly ahead of the open Wednesday, but action is largely random.
TLT is down 0.7% this morning, which is also pushing the U.S. dollar higher. Crude oil is rising as well because of rising tensions in the Middle East.
The Fed started lowering rates so TLT would go up — but it’s gone down instead. So this could push the Fed to raise rates, which it should but probably won’t because that would be admitting it made a mistake before.
An interesting wrinkle this morning is hiring came in less than expected, adding just 122,000 jobs in December vs. expectations of 136,000.
Tesla (TSLA) is also sliding right now and it may be the best time ever to buy Palantir (PLTR)…
I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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