After GDP Report, Can S&P and Bond Market Have it Right?

After the worst GDP report (-1.0%) in three years, the e-SPM remains perched right off of its all-time high of 1914.00, barely flinching in reaction to the news, which apparently is reinforcing the belief that "it was the weather, stupid," and probably a secondary thought that "the Fed still has equity investor's backs" with easy money for a longer period of time (based on Q1 GDP).

I suspect such underlying psychology justifies the amazing buoyancy and resiliency of the e-SPM.

Meanwhile, 10-Year Yield is pressing towards 2.40%, and has gotten it right with respect to the economy (technical factors aside), and to the lack of monetary inflation and velocity.

That said, purely from a chart perspective, recent weakness is about to fully test last July's upside breakout (2.40%) from the 2011-2013 base formation, where significant support should emerge.