Saxo’s note this morning: S&P 500 sets a fourth record before Fed minutes. WSJ’s live blog, same morning: 30-year Treasury yield hits a fresh 24-year high, Dow futures down, and CNBC has the Dow falling 400 points at one point. Both are the same day. Deutsche Bank’s contribution, via a Substack, is the title “Bonds and Stocks Are Pricing Two Different Macro Regimes,” and I can’t improve on it.

What I like is how little the headline needs to argue. If stocks think growth holds and earnings keep climbing, and bonds think inflation sticks and the Fed keeps hiking, one of them has to be wrong, or at least early. Last week’s weak jobs number briefly let both be right, since a soft economy meant fewer hikes. That trick works once. Now yields are up again and the index is still printing records, which tells me the bond market stopped believing the soft-landing story that the jobs report was supposed to confirm.

Meanwhile the bill is arriving in places that don’t trade. Mortgages at a near three-year high with demand shrinking. Used car prices falling in a third straight quarter. Porsche planning to cut a quarter of its workforce. Those are the real economy reading the bond market’s regime, not the stock market’s.

The IMF chief telling governments to tighten belts while global debt soars is sort of funny in this context. Governments are the ones issuing the paper that’s falling in price, and the advice amounts to “please stop making the thing you’re being punished for.”

I don’t know which regime wins. Historically, when two markets disagree this loudly, I’d rather be the one that gets to reprice slowly. Stocks usually don’t get that luxury.

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