Market Notebook

U.S. equities broke higher out of their recent trading range while bond prices corrected sharply lower. Bond price action was quite the show last week as bond prices squeezed above recent highs and then promptly sold off.

Price action in bonds coming into last week was bullish. The opposite is now the case as BND formed a double top, and the closing price of BND was below the 20-day moving average. The last time BND closed below the 20-day moving average was in the first part of June. Regardless of price action, investors should be cautious of opening new bond positions. See last week’s notebook for the discussion regarding bonds.

Congress is considering infrastructure legislation this weekend that contains cryptocurrency provisions that could have widespread chilling effects on crypto development in the U.S. Passage of this legislation without revision would be unfortunate. It is interesting to note that the crypto provisions were attached to a must-pass bill in an attempt to push restrictions without considering them on their own merits. This practice is troubling as legislators should have the right to consider legislation on merit without coercion. Stand by for potential volatility in the cryptocurrency space.