The main market trend
The stock market's main trend is still up. Earnings have supported equities. The equal-weighted broad market keeps pushing higher. The Nasdaq and technology are struggling, held down by semiconductors. The AI space carries huge debt from heavy borrowing to build data centers. Rising rates hurt all that debt, and this is now showing up as a real problem.
The bond yield warning
The 30-year Treasury yield hit above 5.3%, the highest since 2007, and is hovering just below that level. On a monthly chart, the 5-year, 10-year, and 30-year yields all show nearly the same pattern - a bullish setup that points to much higher yields ahead. That puts heavy pressure on stocks.
People are losing faith and feel nervous about holding dollars. They are afraid to buy U.S. bonds. So they need a different currency. Money is moving into Bitcoin and into gold, which acts as another form of currency. This flow gives precious metals and crypto a tailwind, while money leaves the dollar and the bond market. This signals global, long-term fear. Investors are shifting into asset classes outside equities, looking for safety in other currencies.
Can stocks keep rising with yields?
Question: If yields keep rising along with equities, can stocks still make new highs if the 30-year climbs back above 5.3% or higher? Answer: They can, but rising rates will keep pressure on equities. The U.S. market is the top performer in the world and is pulling in money from everywhere, which drives prices up. The AI bubble is still going. Anthropic is set for an IPO bigger than SpaceX, and everyone wants in. Equities should grind higher, with another wave of buying likely, including in semiconductors despite recent worry, rising costs, and some money flowing out. The S&P 500 could run about 10% and the Nasdaq over 10%. But if rates pop and speed up, that will cut the upside for stocks.
Bitcoin and blockchain
Bitcoin has had a strong pop, tied to a move toward the Clarity Act and the search for safety in other assets. I am not looking to buy Bitcoin itself here. Instead, the BLOK ETF, built around blockchain, is coming back to life. It broke out after a pause and looks set for about a 10% move to around $69 per share.
Anthropic coming to market should excite people about everything AI, and blockchain and crypto should come back to life. Speculative money will likely pile in, and speculative money loves small caps (which are doing well), Bitcoin, precious metals, and AI. Much of this is a news-driven move. The Treasury has only made statements so far, not real action, yet the news sparked a big move. This market could still reverse, since many of these pops run on news. Momentum in the Bitcoin and precious metal space is real and worth watching.
Silver and the miners
Precious metals have a strong fundamental story, and silver's is even stronger. That story gets stronger every year. Silver sits about 50% off its highs after a big pullback, but its long-term setup should keep it moving higher.
The best way to play it is through the silver miners. They have been explosive over the past few weeks and built a bull flag, a bullish chart pattern. A move of about 15% to the upside looks likely. A quick drop in the dollar could fuel one more pop in precious metals, which would drive SILJ, the junior silver miners ETF. Miners have far more momentum than gold and silver themselves. Gold and silver move slower, so money is moving into the miners as the leveraged way to play the metals. This is a pure momentum play driven by news, and that wave has not ended yet.
