Is the inflation scare overblown? What about the stock rotation?
- Back in January, we saw the GameStop phenomenon disrupt traditional
trading patterns, though the saga ended quite quickly despite warnings of
shifting power dynamics on Wall Street. Over the last week, we've seen
new
fears spread over market - inflation and rising bond yields. Could those
also prove fleeting as "buy the dip" trends on Twitter?
- "The way in which interest rates have risen is not the type of rise
that we would naturally associate with weakness in the equity market,"
said Morgan Stanley's Matthew Hornbach. "We're not seeing interest rates
spike higher, we're not seeing a taper tantrum like we did in 2013, when
interest rates rose 150 bps in the span of three months."
- Many have also been touting the "equity rotation" as an uptick in bond
yields caused stress in high-flying growth plays. Technology has been
having a rough few weeks, along with momentum trades, which is one of the
most crowded in the bull market. Drivers of the rotation into cyclical
picks have been economic reopenings and broader COVID vaccine rollouts,
though with many growth stocks on the backfoot, it may pay to put some
cash
into the sector.
- "I'm happy to entertain the idea that you need to ring the register
here, but I happen to like growth stocks in a reflation scare. I like
growth stocks when risk is on. I like growth stocks when risk is off,"
Jim
Cramer said on *Mad Money*. "For the better growth stocks, down more
than 10% from their highs, call me a buyer. Not all at once, not big,
but a
buyer nonetheless."
- Stock futures edged up overnight as Jay Powell returns to Capitol Hill
for a second round of testimony before Congress.
|Today, 4:42 AM|10 Comments
- Back in January, we saw the GameStop phenomenon disrupt traditional
trading patterns, though the saga ended quite quickly despite warnings of
shifting power dynamics on Wall Street. Over the last week, we've seen
new
fears spread over market - inflation and rising bond yields. Could those
also prove fleeting as "buy the dip" trends on Twitter?
- "The way in which interest rates have risen is not the type of rise
that we would naturally associate with weakness in the equity market,"
said Morgan Stanley's Matthew Hornbach. "We're not seeing interest rates
spike higher, we're not seeing a taper tantrum like we did in 2013, when
interest rates rose 150 bps in the span of three months."
- Many have also been touting the "equity rotation" as an uptick in bond
yields caused stress in high-flying growth plays. Technology has been
having a rough few weeks, along with momentum trades, which is one of the
most crowded in the bull market. Drivers of the rotation into cyclical
picks have been economic reopenings and broader COVID vaccine rollouts,
though with many growth stocks on the backfoot, it may pay to put some
cash
into the sector.
- "I'm happy to entertain the idea that you need to ring the register
here, but I happen to like growth stocks in a reflation scare. I like
growth stocks when risk is on. I like growth stocks when risk is off,"
Jim
Cramer said on *Mad Money*. "For the better growth stocks, down more
than 10% from their highs, call me a buyer. Not all at once, not big,
but a
buyer nonetheless."
- Stock futures edged up overnight as Jay Powell returns to Capitol Hill
for a second round of testimony before Congress.
|Today, 4:42 AM|10 Comments
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