Big Spike In Bond Yields Worrying Investors

Bond yields are higher again this morning, with the 10-year hitting 5.21%, and getting closer to a new 52-week high. And while the Fed is on hold, other central banks around the globe have been tightening. The trend towards higher rates is obviously worrisome to equity investors.

But I believe this is just a cyclical uptick in interest rates, and not a sign that rates will continue to move indefinitely higher. It actually could set us up quite nicely for a rally later in the year if rates eventually decline from today's levels.

Lehman (LEH) reported very strong earnings this morning, with record revenues. Also, the CFO said he sees positive signs in the subprime mortgage market, as weaker players have exited the business.

Asian markets were mostly higher overnight; the dollar is higher vs. most currencies, and oil is basically flat. If the put/call ratios spike early today, we could see some recovery into the close.