BofA says that it sure looks like markets are starting to sit up as the gap between the optimistic scenario priced in by equities and the much uglier economic situation indicated by bonds is getting bigger. And maybe that is finally translating to diverging moves between equities and bond yields, as the Nasdaq is moving inversely to real US rates.
The firm adds that the risk here is that there is much more downside for stocks as "equities have a long way to go to price in rate sensitivity again". Adding that the Fed may yet be able to get away with its higher for longer policy view as they won't rush to conclude that inflation is coming down and that its job is done.
This is now a key theme across broader markets as already pointed out since last week here. It's best to keep an open mind about it and as yields continue to soar, it wouldn't be surprising to see more calls converge to a similar viewpoint.
