It’s been my theory that the stock market, and especially bond market have been storing inflation ever since May of 2011. Once that inflation starts to leak it’s going to look for undervalued sectors. 

It’s pretty clear when looking at a comparison chart of bonds and energy that inflation started leaking almost immediately once the bond market topped. The recent escalation in the bond market sell off materialized almost instantly as a sharp spike in energy prices. If you think this is bad wait until the stock market starts to leak inflation also. This is how an inflationary spike, like we saw in 2008, begins.

 More in the weekend report.