Inflation Outlook Breaks Nasdaq 100’s Link to TIPS Yield

Concern that inflation is accelerating has brought the relationship between Nasdaq’s biggest companies and Treasuries to a place that it has never been before. The shift is evident in a comparison between the Nasdaq 100 Index and the yield on 10-year inflation-indexed Treasury notes, or TIPS, which the Daily Shot newsletter made Friday in a Twitter post. Their 90-day correlation ended last week at minus 0.42, the lowest reading since TIPS were first sold in 1997, according to data compiled by Bloomberg. The Nasdaq 100 dropped 6.8% from a Feb. 12 record through Friday. TIPS also fell, driving up their yield.