Turnaround Tues… - Well perhaps not quite. It seemed like we were set for the typical BTP-bounce back this morning but the broader market hasn’t played out that way. Cyclicals have held firmly onto the torch today after various members of the FANG world (Amazon, Netflix and Facebook to name a few) hit 3m relative lows yesterday. The 10-year yield hitting its highest in 10 months (target still 1.5%) has spurred banks, themselves appearing on 3m relative high lists, just in time for investors to decide if this is much ado about nothing (earnings Friday). Crude also made 10m highs yesterday and that trend carries on today, the sector capitalizing on the underlying commodity’s strength. But it’s autos that are miles ahead of the pack, and it’s just because Elon tweeted something clever! Instead, Aptiv is ripping after their performance at CES yesterday as it attempts to be the main brain behind autonomous driving. With the move higher in yields however, telcos and utilities are lagging significantly. Could a change in market leadership finally be coming? A stimulus package in the offing (details expected this Thursday), higher rates and stretched valuations from the growth/Mo crowd suggest it just might be.
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