Outlook 05/14: Stock futures are flat early Wednesday following a big rally, as investors digested a 30-Year Treasury Yield jumping around 5%, sitting near the highest levels of the last 18 years. Historically, long bonds should sit well above nominal GDP (currently ~5.0–5.5%) to reflect future growth and risk. But today, the curve is steepening in a new way from fragility, not from expansion. Demand isn’t strong it’s conditional. The U.S. has to pay up to roll debt, not because investors see opportunity, but because they smell exhaustion. The tight spread between nominal GDP and the long bond is not a sign of health it’s a sign that the system is walking a tightrope. If 30Y rates rise above 5.25% while nominal GDP continues to slide, we cross into yield dislocation territory. That’s when Treasury auctions weaken, liquidity dries up, and the Fed loses optionality.
ESM25 (JUN2025): YVAH 5925 YPOC 5916 YVAL 5898 GAP 5903
/ES Plan: Yesterday market closed bullish (PBT 6000), but overnight action looks balanced, moving a within previous value, so these're the opening and initial balance options for current session:
