Rising Treasury Yields Help Pressure Growth Stocks; Economic Optimism Benefits Cyclicals

Rising Treasury Yields Help Pressure Growth Stocks; Economic Optimism Benefits Cyclicals

As the last full trading week of the first quarter comes to a close, it seems we're seeing a continuation of the quarter-end rebalancing that has contributed to the ping pong game between growth and cyclical stocks. In a familiar pattern, Nasdaq NDAQ futures are lagging the other two main U. S. indices as a rising yield on the 10-year Treasury“”which is up about 5 basis points this morning to start the day at 1. 66%“”casts some doubt on growth-company prospects. Rotation out of those stocks, including mega-cap tech-related names, has helped pave the way for investors to shift assets into stocks that stand to benefit from the economic reopening, such as travel, energy, materials and industrials companies. While the market has been encouraged recently by the vaccine rollout in the United States, snags in Europe have kept that optimism in check and contributed to some of the volatility we've been seeing along with concerns that the economic recovery will end up coming with inflation. The latest inflation data, out this morning, showed that the core personal consumption expenditure price index came in as expected. The Fed's preferred inflation gauge showed a monthly rise of 0. 1%, in line with