Sell bonds, buy lipstick
April 23, 2026
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–Quiet session Wednesday with little change in yields though front end remains pressured. 2y +1.5 bps to 3.792% and 10y +0.6 bp to 4.293. Last few sessions featured TY put buyers and this morning rates are higher globally. Highest 10y gilt yield was 4.99 in March, currently just above 4.96. USM6 is printing 113-25. On the daily chart there are several highs around 115-00 (4/8, 115-00. 4/15, 114-30. 4/17, 114-29. 4/21, 114-27). A couple of closes above 115 would reverse the weakness but until then, lower prices are the path of least resistance. CLM6 last print 94.35, +1.38.
–Today’s news includes S&P PMI expected 52.5 from 52.3 and Jobless Claims, as always, expected around 210k.
–May treasury options expire tomorrow. TYM6 settled 111-09 and the 111.25^ settled 0’18. The 111.25p settled 8 and is currently in-the-money with TYM 111-02. TYK6 111p has max open interest on put side with 150k open. now 7/8 ref 111-02.
–Private credit tidbit from @BoringBiz
Thoma Bravo is reportedly handing over the software company Medallia to creditors after restructuring negotiations failed to materialize This is a $5.1 billion equity wipe out for the firm, who bought the business for $6.4 billion in 2021 Largest creditors include Blackstone, KKR, Apollo, Antares and Ares This loan was last marked anywhere between 70c to 100c on the dollar, according to most recent BDC filings from them
–On a more positive note: Marijuana will move from Schedule I—reserved for drugs with no accepted medical use and high abuse potential, such as heroin—to Schedule III, which includes drugs with moderate-to-low physical and psychological dependence, such as ketamine, testosterone, and Tylenol with codeine.
Nice pops in TLRY, Canopy and Curaleaf. Tax burdens will be eased with this change.
–Another notable clip: Chicago Cubs on a hot streak: “The end result was an eight-game winning streak that marks the Cubs’ longest run in April since an 11-game streak in 1970.”
–From today’s FT: L’Oreal hails ‘lipstick effect’ as war drives sales of small beauty comforts.
This phenomenon is called the ‘Lipstick Effect’, although it extends to other beauty products and small luxuries as well. It was first noticed by Leonard Lauder when he realised that sales of his luxury lipstick product had steadily increased throughout the recession in the early 1990s. This was then found to be true in other recessions, such as 2008, and even in the Great Depression.
