The taper worms are still driving things this am.

To the taper worms, tapering equals ‘bonds’ higher in yield and stocks lower in price.

Fundamentally, however, the Fed only tapers if the economy is strong which is good for stocks.

And no tapering means the economy is weak, which is fundamentally bad for stocks and bond friendly (lower yields).

That is, the Fed uses the taper message to signal its economic forecast, and it’s that economic forecast that is fundamentally meaningful for stocks and bonds.

But in this thin/illiquid May market the whims of global hedge funds and portfolio managers rule.