Inflation has been the market theme in the past two months. Inflation sentiment hits one year high, at 4.6% according to the University of Michigan. However, commodity is on a pause. For example, lumber futures collapsed by 40%, corn futures dropped 15%, etc. Thus, the inflation plays may start to diminish.

The Fed’s FOMC April minutes showed that US policymakers maintained their cautious stance, with some willing to discuss tapering in future meetings. This hints early rate rise, which will trash both stocks and bonds. Be prepared!

In terms of this week’s market condition, we used the high volatility settings to scan the conforming credit spreads. Premier Members can view the screening reports of conforming credit spreads, and others can join us to test-drive free for 30 days.