I don't know about you, but I am so sick of arguing with the bond market. Every time we get a strong employment number like yesterday's weekly claims, I think to myself, the bond market just have to be wrong. Every time I speak to the big regional banks and hear about the strength in commercial lending, I think, the bonds have to be wrong. Every time I see all the economic activity around me, I say, they are dead wrong.
And, most important, every time I see the economically sensitive stocks go higher, I think, the bonds are out of their minds.
But then I remember what I learned my first week at Goldman Sachs: the bonds are the score. The score is never wrong. Whatever you may think about the work you put together, whatever you may wonder about how good your own mosaic is, you can't bet against the bonds.
We have seen so many swirling rotations in the last few days, but the only one that is really starring after this five-day rollercoaster is the money going into the foods and the drugs, the one that started as the minor chord of the rotational symphony and is now the major one. You know that's the bonds calling the tune.
How can you be sure? These days I like to double-check what's ever crazy enough coming out of Washington. Yesterday, the whole day, all I heard was that the President was going to come down hard on the drug companies.
But there were Johnson & Johnson (JNJ) and Eli Lilly (LLY) and Action Alerts PLUS charity portfolio holding Abbott Laboratories (ABT) working their way up all day, as they have pretty much every day since this rotation began. These stocks have been incredibly strong. They plod, they don't jump. Yet, even when something fails to shine within the pipeline, like what's happening with Bristol Myers (BMY) , it still works higher.
It's been the most consistent trade of the week, and the bonds gave it to you on a silver platter. With the futures up today, it's a great place to look for something to own for a trade or, at this pace, an investment.