40 years, 2 charts

Yahoo Finance – S&P 500, DJIA, NASDAQ in ascending order
Macrotrends – 10 year Treasury yield

If you assume that…

  • NASDAQ=tech, DJIA=leaders, S&P=broader market… and…
  • 10 year rate=inflation expectation, borrowing cost benchmark…

And note that…

  • the tech composite has been distancing itself for the past ten years… and…
  • the sector leaderboards have been distancing for the past twenty… and…
  • the dot-com bubble grew with volumes that haven’t since declined… and…
  • there must be liquidity as well that drives borrowing costs down… and…
  • all this excess in liquidity has fed asset inflation only…
  • which has been uneven…

Then you may infer that…

  • there’s a barbell market taking shape, of tech at one end, safety on the other… and..
  • even within that construct, concentrations are emerging and expanding… and…
  • the great liquidity that drives up asset prices comes from these disproportionate consolidations… and…
  • a new banking system has thus emerged outside of banks… and…
  • the cause-effect of rates and asset values may be in fact reversed… and…
  • there’s a trickle-down effect, now based on big tech at the top…

And wonder about what happens if the trend continues, which it might, with even greater force, if the charts are any indication…