Cooler inflation data and cooler economic data have helped bond yields come down. Measuring the 10-year Treasury, yields dropped from 5.0% at the S&P 500 low near the end of October to 4.46% at the time of writing. So does a 50 bps yield drop equate to a 9% or near 400-point rise in the S&P 500? The lower yield does open the door to some multiple expansion. The market weakness in October was primarily caused by high yields. If 50 bps = 9%, well load up. We think yields will continue to grind lower on softer economic data. Unfortunately, that “math” won’t hold. There has been something else afoot in the month of November…stimulus.

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