Hi Traders,

Nvidia (NVDA) gets all the headlines right now. The bond market moves everything at once, though, and this week it did.

Last week the semiconductors had one of their worst days in decades. The chip index dropped more than 12 percent on November 5th, its second-worst day on record. The bond market didn’t sell with them, and that’s how I knew the sell-off came from crowded positions unwinding and had nothing to do with growth slowing.

This week the bond market, the wise old man of Wall Street, got up off his La-Z-Boy and started selling. October CPI came in at 0.4 percent against 0.3 expected, and core inflation beat by a tenth too. The 10-year Treasury yield (what Washington pays to borrow for 10 years, and the rate your mortgage keys off) jumped about 10 basis points and poked back over 5 percent.

Then the buyers walked. Dealers got stuck with 10 percent of Tuesday’s 10-year auction, the most since May, and nobody wanted Thursday’s 30-year bonds either. Futures now put the odds of another Fed hike in December around 85 percent.

On Thursday corporate bonds, Treasuries, gold and Bitcoin all fell together. Energy was the only thing green. When the safe stuff and the risky stuff drop on the same day, the cost of money is going up on everything.

When the bond market starts driving, you don’t argue with it. So this week I’m getting out of the way of the stocks that need lower rates, and I’m finding one with its own engine.

One to Love: The Beat Nobody Wanted

GE Aerospace (GE) beat and raised (topped earnings estimates and lifted its full-year outlook) on October 20th. It earned $2.25 a share against about $2.02 expected, orders jumped 49 percent, and management raised 2026 guidance across the board. Sellers didn’t care and knocked it down to $285.

Then the buyers showed up. GE ran 20 percent in 13 trading days and took back every bit of that drop. It pulled back Thursday with everything else, and Friday it held.

GE’s sitting on a commercial services backlog north of $170 billion. Those engines need servicing whether the 10-year sits at 4 percent or 5. I think this one’s headed for new highs.

One to Leave: Somebody Forgot to Tell the Malls

Real estate trades with bonds. When bond prices fall, property stocks usually follow, and so far they haven’t. Since November 4th, long Treasuries in the iShares 20+ Year Treasury Bond ETF (TLT) dropped 2.9 percent, while the Real Estate Select Sector SPDR (XLRE) only slipped 1.7 percent.

Simon Property Group (SPG) actually gained 2 percent over that stretch. It ran harder than most, up 14 percent in a month, and it tracks bonds more closely than anything else in the group. Simon’s own CEO pointed out on the November 5th call that rates have climbed 50 to 60 basis points since summer.

My worry is that the bond market rolls over from here and drags every real estate name down with it. I don’t want to own any of them with the 10-year at 5 percent. It’s time to leave the group.

With the 10-year at 5 percent and Nvidia reporting in a couple of days, it’s hard to tell what the crew will pick on Monday’s Ticker Highlight Show. Every trader brings two ideas, and only one makes the cut. It goes live Monday at 10:30 AM, so tap here to join before then.

Enjoy the journey,

Tim