Rising Real Rates Signal Stronger Growth: Upgrading Equity View

The market continues to hold near all-time highs despite pressure from higher bond yields. This week brought relatively little economic data, but the important takeaway is that the underlying economy still looks strong. High-frequency indicators, jobless claims and consumer spending data continue to point to solid growth, while this week’s CPI, PPI and retail sales reports will provide the next important test for both the economy and the Federal Reserve.