Morning Note: "No Way They'll Do That To Us"

Clearly, all markets aren't all in on the Fed and the ECB's (European Central Bank) stated view that the present level of inflation, while not abating as soon as they had anticipated (prayed), is "transitory." Rate hike odds -- more and sooner than previously priced -- are being priced in to a degree that is beginning to play havoc with yield curves.

Here's our chart of the 2yr/10yr treasury yield curve:

While it's presently a long ways from a recession-signaling inversion (where the 2yr yield is higher than the 10yr), a rolling over denotes anticipation of a weaker economy going forward, which "the market" believes would be the case were the Fed to begin raising rates as it's currently pricing in.

Stock markets, on the other hand, ain't buying it. They're saying "no way they'll do that to us!" And, frankly, I think they, for the moment, have the present players in the Fed's and the ECB's numbers.

That said, however:

Asian equities struggled overnight, with 9 of the 16 markets we track closing lower.

Europe's a mess this morning, with all but 2 of the bourses we follow in the red, as I type.

US major averages are down to start the day as well: Dow down 30 points (0.08%), SP500 down 0.32%, SP500 Equal Weight down 0.09%, Nasdaq 100 down 0.58%, Nasdaq Comp down 0.54%, Russell 2000 down 0.08%.

The VIX sits at 16.92, up 2.36%.

Oil futures are down 1.24%, gold's down 1.09%, silver's down 0.81%, copper futures are down 1.89% and the ag complex is down 0.39%.

The 10-year treasury is up (yield down) and the dollar is up a big  0.62%.

Led by solar stocks, water stocks, bank stocks, metals miners and utilities -- but dragged by uranium miners, oil services stocks, MP (rare earth miner), Latin American equities and base metals futures -- our core portfolio is off 0.52% to start the session.

Once again, from my all-time favorite book:

"The big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend."

 --Jesse LIvermore

Have a great day!
Marty