10-YEAR YIELD IS SPIKING OVER 1.60% AND MAY BE HEADING TOWARD 2.00%

10-YEAR YIELD EXCEEDS 1.60%...After a modest consolidation, bond yields are spiking again.   The daily bars in Chart 1 show the 10-Year Treasury yield climbing 10 basis points to 1.63% which puts it at the highest level in more than a year.  The weekly bars in Chart 2 put that upside breakout in better perspective and shows the TNX heading toward the top of a previous consolidation pattern formed during the second half of 2019.  The top of that previous pattern ranges from 1.95% to 1.97%.  That suggests that the TNX could approach 2% before running into some potential chart resistance.   Today's spike is having a mixed effect on stock prices.

STOCKS ARE MIXED...The Dow is trading in record territory while the tech-dominated Nasdaq market is under pressure.   Large tech growth stocks are especially vulnerable to rising yields.   At the same time, value stocks continue to gain ground.   Two groups in the black today are industrials and financials.   Financials, and banks in particular, which are big beneficiaries of rising bond yields and a steepening yield curve are in record territory.   Industrials, which are also hitting a new record, are being led higher by airlines and aerospace.   The Dow Transports are also hitting a new record as are small cap stocks.    Rate-sensitive tech stocks are the day's weakest sector.   Six sectors are in the black with five losing ground.   The day's three weakest sectors are technology, communication services, and consumer discretionary.