CLIP - Ride High But Stay Dry: Why I'm Accumulating Cash As The Market Rebounds
2025-05-17 08:05:00 ET
Summary
- The 10-Year Treasury yield signals that the market does not expect a recession in the near term.
- Current yield levels suggest inflation expectations remain elevated compared to recent years.
- Investors should interpret the bond market as pricing in persistent inflation rather than imminent economic contraction.
- My outlook is cautious: focus on inflation-resistant dry powder vehicles as the 10-Year Treasury signals higher-for-longer inflation risks.
- High-beta growth stocks such as the Magnificent 7 have eliminated the outperformance dividend stocks that had over them just a few weeks ago.
Déjà vu, anyone?
This market rally is starting to feel a lot like the V-shaped stock market recovery in the early months of COVID-19.
I was surprised how fast the market recovered back in April-May 2020, and I'm surprised at how fast it has recovered in April-May 2025 as well....
Ride High But Stay Dry: Why I'm Accumulating Cash As The Market Rebounds