Monday was not a particularly good day for stocks. The Nasdaq tumbled by 2.9%, the S&P 500 dropped more than 0.5%, while the Dow Jones industrial average managed to eke out a gain of nearly 1%. The day’s best performing sector was utilities, up 1.4%, and the Dow tracked the sector closely. Monday’s poorest performing sector was technology, down 2.4%, closely tracking the Nasdaq Composite.

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The action came in the bond market, particularly the market for U.S. Treasuries. In his Market Commentary newsletter, growth investor Louis Navellier focused on the market for U.S. debt and the Treasury auctions due later this week.

Navellier cited Appaloosa Management founder and CEO David Tepper, who had earlier told CNBC that interest rates were not going to rise much more. For Monday at least, Tepper was right. The 10-year Treasury yield dipped by a couple of basis points but still closed near 1.6%. The 10-year note traded at around 1.54% early Tuesday and that appears to be cooling inflation concerns.

Regarding this week’s Treasury auctions, Navellier commented:

[T]he focus will be on bid to cover ratios, to see how much bidding there is and on the Fed to see if they have enough quantitative easing to control treasury yields. The Fed is clearly allowing treasury bond yields to rise. And the yield curve is getting a lot steeper and they’re dedicating more [of] their quantitative easing to the short end of the curve. But nonetheless, the market was oversold, it’s due to balance.

In other words, now is a buying opportunity. That appears to be the general view in Tuesday’s premarket session. The Nasdaq was trading up more than 2%, the S&P 500 was up nearly 1% and the Dow was up about 0.4%.

Navellier also noted that the stimulus/relief checks sent to Americans in January drove retail sales up 5.3% (6.1% excluding vehicle sales), and he expects the coming $1,400 checks to drive another consumer spending “surge.” That indicates that first-quarter revenues will be even better than they were in the fourth quarter and that all the good news that’s “pouring out” now means “it’s time for the market to party.”

Not everyone agrees, of course, but Federal Reserve Chair Jerome Powell continues to say that the central bank has not run out of bullets yet and that with inflation still running well below 2%, higher inflation is nearly mandatory. Powell apparently thinks that rising inflation is likely to be temporary, while others see climbing inflation as more or less permanent.

Navellier’s take: “[T]here’s no panic selling. Use any dip as a buying opportunity, hang on and enjoy the ride.”

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