The markets clearly didn’t like the implication for expensive mega-cap names based on the data and the path of rates, but we’re not necessarily looking at an imminent correction yet. If last week did mark a turning point for U.S. stocks, the potential for small-caps relative to large-caps is HUGE. Even though Treasuries moved higher last week, we’re still not seeing any conviction in either direction.

Tech continues to be an unquestioned leader in this market even in the face of questions about valuations and a lack of market breadth. Investors seem unwilling to believe that there’s even a modest degree of risk in junk bonds at the moment, but they might soon be learning otherwise. Investors may get the impression that everything in the markets and economy are just fine because tech is rallying, but I think small-caps are telling the real story.

Tech has underperformed for the 2nd week in a row following its recent tear, but it’s still a very narrow market. It seems that the more likely it becomes that Trump gets back into the White House, the more that inflation concerns will persist. The wild card is the yen, which looks primed for an intervention by the BoJ at any moment.