This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Last week's decline after the hot consumer price index report pushed off the perceived moment of a Fed truce took the S & P 500 below the 3,900 area bulls were hoping would hold. The 2-year Treasury yield pushing 4% is rippling across asset classes, reflecting the combined inflation backdrop and anticipated Fed response. Some equity-valuation models tied strictly to this yield suggest the S & P 500 forward price-earnings "should" be more like 13x-14x rather than the current 16.5x. It's a crude instrument for gauging fair value but has largely been in tune with valuation trends in recent years.

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