'Fast Money' Recap: Bond Volatility Leaves Stock Market Yawning

NEW YORK (TheStreet) -- For now, U.S. equities are shrugging off the volatility being seen in the bond market, where yields on the 10-year Treasury bond shot higher by 4.4% and are higher by nearly 13% this week alone. 

However, equities will eventually start to suffer if the bond market remains this volatile, Brian Kelly, founder of Brian Kelly Capital, said on Wednesday's CNBC "Fast Money" TV show. The European Central Bank has already stated that it's not worried about volatility while pushing through with its QE program, which could also cause volatility in the U.S. stock market, he added. 

The stock market has had a lot of opportunities to selloff, yet it has traded relatively well. That leaves Guy Adami, managing director of stockmonster.com, thinking that the S&P 500 could go on to make new highs. The fact that the index is lingering around its all-time highs makes it seem like a selloff is not on the near-term horizon, he added. 

The lack of liquidity could create a problem in the bond market, as the iShares 20+ Treasury Bond ETF (TLT) declined another 1.6% on Wednesday. However, the higher yields bode well for financial stocks, a sector that Pete Najarian, co-founder of optionmonster.com and trademonster.com, is bullish on. 

Najarian pointed out the bullish options activity in stocks such AIG (AIG) and JPMorgan Chase  (JPM). "I think they all have room to the upside," he said of the different industries within the sector. 

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