Treasury yields might spike, but should prove short-lived

Short-term trends remain bullish while market breadth continues to expand, given the recent improvement in Equal-weighted S&P 500.  It’s important that market participation is expanding after this push back to new all-time highs for SPX, and helps to establish some credibility to this move, which was lacking in both breadth and momentum back in May. Given the broadening out in the US Stock market over the last week, my view is that the push to new all-time highs will prove difficult to fade right away.  Bond yields could very well diverge from the US Dollar’s weakness and bounce into mid-July as the Yield curve starts to re-steepen. Meanwhile, precious metals likely begin to turn back up in July, and Gold should push back to new all-time highs. Overall, I don’t sense that markets show much stalling out until after the Independence Day holiday, and even on a minor dip post 7/4, it’s likely that July should mirror the historically bullish seasonality trend in post-Election years that’s been working thus far in 2025. This calls for July strength in Equities, which might not show much consolidation until the month of August, which might prove more important.

The most important technical developments this week seem to revolve around three key themes:

  1. Treasury yields are starting to stabilize and turn higher.
  2. Momentum stocks are taking a breather after the steep runup.
  3. Continued broadening out in other sectors outside of Technology.
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