Stipelis Commentary:
Markets took a hit today, with sharp declines across equities, commodities, and bonds. While there were signs of an intraday bounce, the underlying weakness suggests the selling may not be over. Stipelis expects continued pressure in bonds as the flight to safety theme begins to unwind.
Markets faced another turbulent session today as broad-based selling gripped multiple asset classes. The Bond Index flashed a potential reversal signal, forming a pattern reminiscent of a “hanging man” — often associated with exhaustion in upward trends. This comes amid rising uncertainty around interest rates and economic growth. Stipelis notes that despite today’s intraday recovery, the move could indicate further downside in the days ahead as risk sentiment remains fragile.
Metals gave back recent gains, falling 1.50% on the day. Weakness was widespread, with copper and other industrial metals contributing heavily to the slide. In commodities, the Stipelis Agricultural Index Indicator dropped 4.5%, driven by declines in coffee, cocoa, natural gas, copper, and lumber — each losing over 2%. These losses point to deeper concerns around global demand and positioning unwinds.
Equities weren’t spared either. The Stipelis Equity Index fell over 5% during the session, briefly pushing the index down 20% from its highs, meeting the technical definition of a bear market. It closed with some intraday recovery but remains down 12% year to date. While this bounce may suggest short-term exhaustion in selling pressure, Stipelis remains cautious.
From our view, the current rout is not over, though we may be entering a phase where some of the forced selling begins to slow. Risk appetite has clearly deteriorated, and the market is still struggling to find a stable footing.
Prediction:
Stipelis anticipates continued weakness in bonds over the next several sessions. The recent surge from flight-to-safety flows may be peaking, and with yields potentially stabilizing or rising again, bond prices could face renewed selling pressure.
In this environment, risk assets may remain volatile as markets reassess the macro landscape and fiscal policy.
Stephen Coleman Head market Strategist 4-7-2025