So why have stocks not been negatively impacted by the change in Fed Funds expectations as illustrated above? Jim Bianco’s view is that it’s because bond yields have not broken out yet. Per Jim Bianco, “It is about the competition for stocks. High yields suck money away from stocks. As long as yields stay down, the stock market can rally in a form of TINA (There Is No Alternative). But the stock rally ends when/if yields move up and provide an alternative. If yields move up enough, stocks reverse. I believe yields will break out higher in the next few weeks. If so, we will find out if my premise is correct that low yields are supporting stocks.” Substantial money market rates attracted a record $6 trillion of cash to the sidelines, so if the “TINA” narrative holds for equities and yields don’t break out, there may still be a lot of dry powder to fuel rebounds from potential future pullbacks.

Bitcoin closed above $47k on Friday, with a fully diluted market cap that is just under $1 trillion. Standard Chartered Head of Crypto Research Geoff Kendrick told The Block that the Bitcoin rally was driven by fund flows into the new Bitcoin ETFs even as GBTC continues to sell. K33 Research analyst Vetle Lunde posted data demonstrating that the 9 new Bitcoin ETFs (BlackRock, Fidelity, Bitwise, Ark 21Shares, InvescoIVZ, VanEck, Valkyrie, Franklin Templeton and WisdomTree) amassed over 200k BTC, and that since launching, “the total net inflow to U.S. spot ETFs sits at a massive 51,134 BTC.”