By: Kent Engelke | Capitol Securities

It was a mixed day yesterday. Oil is at levels not experienced since November 2014. Technology came under pressure, the result of lackluster results from a former market leader. Economic data showed continued strength and the 10-year Treasury is now at yields last experienced in 2011.

And then there are the geopolitical issues from Korea, Middle East, China, to the surge of Italian populism that is demanding the abandonment of the mulitpolarity that espouses the EU.

Wow! Today is not the same as yesterday.

Speaking of change, in my view there is a huge change occurring in the $2.7 trillion corporate bond market, partially the result of a change in trading mechanics and partially the result of a change in monetary policy that is driving hedging costs considerably higher.

According to HSBC, a major change in global capital funds is underway that will create a “disorderly” retrenchment from dollar debts and “no developed credit market will escape the bearish correlations.” HSBC further states this dislocation may be amplified given the chronic lack of liquidity, the result of regulatory fiat that has greatly reduced the ability of money center banks to maintain orderly markets.

It is often written the newest regulations create the next crisis. I hope this axiom does not today materialize.

Last night the foreign markets were mixed. London was down 0.13%, Paris was up 0.13% and Frankfurt was down 0.02%. China was up 1.24%, Japan was up 0.40% and Hang Sang was up 0.34%.

The Dow should open flat ahead of conflicting geopolitical news. The 10-year is up 4/32 to yield 3.10%.