Yields keep rising, Novo's tough week, why cat product sales are surging and more in Morning Squawk

The 30-year Treasury yield reached its highest level since 2004, pushing the average 30-year fixed mortgage rate to 7.45% and raising concerns that the rapid rise in rates could destabilize risk assets. Geopolitical risk remains elevated after the Senate rejected a measure to end the Iran war, though oil prices declined on reports Iran could reopen the Strait of Hormuz within seven days if conditions are met. Corporate moves were mixed: Novo Nordisk shares fell more than 10% this week amid GLP-1 competition from Eli Lilly, while Meta rose nearly 17% following new consumer-AI product announcements.

Analysis

The Treasury repricing is the dominant cross-asset variable: higher long-end real yields pressure duration-heavy multiples while raising financing costs for housing, autos and lower-income discretionary demand. The first-order equity response may remain contained while earnings estimates hold, but the 1-3 month risk is multiple compression in mega-cap growth if the 10-year yield remains elevated and term premium—not just expected Fed policy—is driving the move. A sustained steepening also favors cash-generative, low-leverage defensives over refinancing-dependent consumer and small-cap exposures.

Energy's relief rally risk is asymmetric. A credible normalization of shipping flows can deflate crude quickly, but refined-product disruptions and higher freight/insurance costs can persist after headline de-escalation; that distinction matters more for U.S. refiners than for DVN. For DVN, the near-term upside from higher realized prices is offset by the possibility that an oil pullback removes the political and activist pressure supporting a strategic review premium.

LLY's relative momentum reflects an increasingly important commercial inflection: oral GLP-1 adoption lowers friction versus injectables and makes new-patient share the key leading indicator, rather than total prescription growth. NVO's valuation reset is not necessarily capitulation unless management demonstrates that pipeline breadth can restore pricing power or margin durability; otherwise, oral competition turns obesity from a capacity-constrained category into a marketing- and rebate-intensive one. META's rally prices optionality before monetization details: hardware can improve distribution independence, but its P&L impact is likely negative initially through R&D, subsidies and channel build-out, leaving downside if engagement or ad-product linkage is not quantified by the next earnings call.

The underappreciated consumer read-through is cat mix, not simply pet spending: cats support recurring food/litter demand but generally carry lower ticket and services attachment than dogs. CHWY can benefit through autoship retention and private-label mix, while WOOF's store and services model has less direct exposure; GIS benefits only if premium wet-food and treat velocity offsets commodity and promotional pressure.

Key Decisions for Investors

• Maintain a 1-3 month quality-duration hedge: short IWM versus long XLP or a basket of cash-rich mega-cap quality. Add only if the 10-year yield holds above its recent breakout level for five trading days; cover if yields retrace below that level or payroll/inflation data materially soften. Target 5-8% relative return, with a 3% stop on the spread.
• Pair long LLY / short NVO over the next two earnings cycles. The catalyst is disclosed oral-GLP-1 new-start share, net pricing and forward obesity guidance; target 10-15% relative performance, but exit if NVO shows sequential U.S. share stabilization plus pipeline data that supports superior efficacy or tolerability.
• Do not chase META after the sharp weekly move. Use a 3-6 month call spread only after management quantifies device economics, user adoption or ad-conversion linkage; absent those data, a post-earnings long META / short GOOG hedge is preferable to outright exposure because distribution optionality is already heavily valued.
• Treat DVN as a tactical, not structural, energy expression: buy only on a crude-price pullback if activist or strategic-review disclosures remain active. Reduce on any confirmed shipping normalization and falling crack spreads; a sale-process update is the required catalyst for upside beyond commodity beta.
• Favor CHWY over WOOF for 6-12 month pet exposure, sized modestly. Require evidence of autoship growth and gross-margin stability at the next report; exit the relative trade if CHWY customer growth decelerates while WOOF's services revenue accelerates, which would invalidate the recurring-revenue advantage.