I’m both a rally skeptic and not.

I harbor a deeply-engrained pessimism about more or less everything, I lived through both the dot-com bust and the GFC, I think human beings (i.e., investors) are more unhinged than rational and I spent over a year learning the dark art of digital bear propaganda from the master himself. So, if it’s a bear case you’re after, I can always oblige.

And yet, I’ve learned over the years that penning a daily market “doomer” report is a pretty awful way to spend your life. Not because it’s inherently depressing (I actually enjoy writing bear articles, and my depression comes naturally, which is to say it’s there regardless of what I write), but rather because it’s inherently futile and profoundly dishonest given stocks’ penchant for rising over time.

By and large, I’d say the balance of market color here actually tilts bullish if you read between the lines (i.e., below the headlines). And I’m quite certain that’s been the case since the Iran war lows in late-March. I don’t pen “investment advice,” per se, but I have a vested interest (figuratively and literally) in being on the right side of rallies.

With all that in mind, I’m starting to get a little wary of this one (this rally), at least on a near-term horizon.

Friday felt like a breaking point vis à vis equities’ tolerance for higher yields. I’ve seen countless such breaking points over the years.

10s were cheaper by 20bps versus last Friday after trading very heavy into the weekend.

By now, it’s just too much. The ongoing oil surge, the CPI jump, the PPI heater, another demonstrable hawkish repricing in STIRs and, not to be underestimated, the pressure from gilts.

You’re reminded that the oil-driven selloff in bonds (TLT’s on track for a third straight monthly loss) magnifies the stock rally from a relative attractiveness perspective.

As the figure above reminds you, stocks came into this week trading near the most expensive versus bonds since the dot-com boom. That was before the S&P hit another three highs and 10-year US yields rose another 20bps.

I’m not a buyer of bonds in this macro environment just because the long bond (i.e., the 30-year) breached 5%. I’ll be a buyer when 10s are 5%, but not until then.

If we get there, or, judging by Friday’s price action on Wall Street, anywhere near there, equities are going to be lower. Meaningfully so, perhaps.

The figures above, from BofA’s Michael Hartnett, give you some context for what it’d mean if the YTD yields-equities juxtaposition were to continue.

“The Nikkei’s annualizing a big 86% gain and 10-year JGB yields are on pace for a near 150bps rise, reminiscent of 1989 and 2025 [while] the Nasdaq and 10-year UST yields are both annualizing gains that ominously echo 2009 and 1999,” Hartnett wrote.

I’m not sure I’d use the word “ominous,” but I would say that at least on a short horizon, yields need to stabilize or, ideally, recede, if the equity rally’s going to run any further.

Meanwhile, whoever writes Bagher Ghalibaf’s market-related social media messages conjured up a classic following the first long bond sale to clear with a five-handle in 19 years.

“So you’re funding Hegseth the failed TV host at rates unheard of since 2007, so he can cosplay as Secretary of War in our backyard in Hormuz?” Ghalibaf’s ghost writer sneered. “You know what’s crazier than $39 trillion in debt? Paying a pre-GFC premium to fund a LARP and all you’ll get is a brand new GFC.”