Room for a Bounce?

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Our View

There are lots of things weighing down on the S&P right now, but this is front and center.

There is $2 billion of equities for sale as the pension funds rebalance positions and $36 billion in S&P stocks for sale this week tied to the CTAs. Plain and simple, there is plenty of selling around.

Another thing flashing warning lights is the TLT. I recently flagged the bonds, but the selling has not relented. The TLT has made new lows in both sessions so far this week and is trading at its lowest level since Q1 2011. Further, it’s down 50% from its 2020 high.

Is the weakness in bonds telegraphing more weakness in stocks?