Breadth Thrusts & Bread Crusts: Context Matters

JC Parets
April 15, 2021

From the desk of Willie Delwiche.

We were cooped up all winter, so we decided to head south. 

As soon as the kids got out of school for spring break, we loaded up the car, left Milwaukee, and headed for the Gulf of Mexico. 

It was a long trip -- and I had plenty of time to think along the way. In a world of momentum and trends, we want to remember where we’re coming from so we can better understand where we’re going.

I grew up about 40 miles southeast of Washington, DC, in the rural tri-county area locally known as "Southern Maryland". Interesting note for history buffs: this was where John Wilkes Booth fled after shooting President Lincoln at Ford's Theatre. Of course, as a kid, I didn't ascribe much of a broader context to my surroundings. It was just home. 

I moved to Milwaukee right after I graduated from the University of Maryland (Go Terps!). I only had to say "y'all" once to be declared a Southerner through and through. That was perfectly fine with me (I was from Southern Maryland after all) and I thought little of it.

On a visit from Milwaukee to Nashville a number of years ago, I was having dinner with a friend and his wife. Knowing that I had arrived from Milwaukee, she asked if I had ever been to the south before.

I politely and confidently informed her that yes, I had. I sought to burnish my credentials with her (she was originally from Louisiana) by noting that I had in fact been born and raised in "Southern Maryland". But she politely chuckled at my naivete.

When I arrived in Milwaukee, I was coming from the south. On my trip to Nashville, I had arrived from the north. I underestimated the importance of where I was coming from. Growing up near Washington, DC means something different to those in Brew City than it does to those in Music City. 

While locations (levels in the market) matter, so too does the journey and trend that gets us to our destination. Take bond yields. The 10-year T-Note yield at 1.75% may have a different impact on the market (or various segments of the market) when it gets there from above and the underlying trend is falling than when it gets there from below and the underlying trend is rising.

As for our spring break voyage -- it was a lot of driving. But we enjoyed the ride. The cities and states we passed through along I-65 looked a bit different to us as we headed home, compared to just a few days earlier as we were heading south.

Context matters.

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