Since the news of the good results of the clinical trials in November, cyclical companies are leading the way in the stock market.
Especially during the month of February, we have experienced the typical movements that characterises an early economic cycle: steepening of the curve, price increases in commodities and cyclical sectors outperforming defensive sectors.
Fuente: Thomson Reuters. Elaboración propia Anchor Capital Advisors.
The month of February has also been marked by the fluctuation of the American ten-year rate, which has risen approximately 40 basis points.
Along with the ten years, other long sections of the curve have also experienced increases:
This hike in yields has led to losses for the majority of investors positioned in conservative fixed income, both government and high credit quality. Specially, those investors who were positioned in longer sections of the curve, where duration has acted as a catalyst effect, thus increasing losses.
Interestingly, the Nasdaq has behaved similar to the defensive sectors. It seems that the upside defensive bias that technology has offered during the pandemic has turned into downside once post-pandemic expectations have improved.