8.18.23 Yield on the Rise—Too Much Too Fast
Key Takeaways:
• Yields have moved a little too much too fast for equity markets, pushing the correlation between stocks and 10-year Treasury yields into negative territory for the first time since March.
• From a technical perspective, 10-year Treasury yields remain uncomfortably high as they approach resistance from the October highs. Considering stocks bottomed nearly at the same time longer duration yields topped out last fall, a breakout to new highs on the 10-year would be a warning sign for a potentially deeper pullback in stocks.
• Energy could outperform if yields continue higher. The sector is the only one p
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