D&D Note (2.22.2018) ~ Sell The Rallies? ~

D&D Note (2.22.2018) ~ Sell The Rallies? ~

This week we’ve seen an interesting pattern of morning rallies followed by afternoon selloffs. Have investors shifted from buy the dip to sell the rally? Much of this volatility is being driven by the bond market and specifically the 10YR yield.

The UBS director of floor operations and Wall Street veteran Art Cashin today said, “That 3 percent level is both a target and a kind of resistance. Everybody knows it’s like touching the third rail. The assumption is once they do it, all hell will break loose. So we’ll wait and see.” The big moves we saw on Wednesday he says was probably due to “our friends, the long-lost ‘bond vigilantes.”

Here is a look at both DOW stocks and S&P sectors that tend to perform well and rise when bond yields rise:

DOW INDEX stocks that rise

– J.P. Morgan

– Goldman Sachs

– Disney

– Cisco

– American Express

S&P 500 INDEX sectors that rise

– Financials

– Industrials

– Materials

– Consumer Discretionary

– Telecom

Here are the DOW stocks and S&P sectors that tend to perform bad and fall when yields rise:

DOW INDEX stocks that fall

– Procter & Gamble

– Coca-Cola

– McDonald’s

– Microsoft

– Exxon Mobil

S&P 500 INDEX sectors that fall

– Utilities

– Consumer Staples

– Energy

– Technology

– Health care

Now is the time to revaluate your portfolio and position yourself for both rising rates and rising inflation. Be diversified and be ready for further volatility.

 

D&D movers:

– WNS up 3.72%

– PYPL up 1.56%

– ITW up 1.28%

– BA 1.01%

– IMLFF down -4.55%

– UNLRY down -3.27%

– APHQF down -1.96%

– TSM down -1.17%

Indexes

– DOW up 0.66%

– NASDAQ down -0.11%

– S&P up 0.10%

Sector Movers:

– Real Estate up 1.14%

– Energy up 1.08%

– Materials up 0.69%

– Financials down -078%

– Health down -0.15%

Notes

– US 2-YR 2.254% (down -0.016)

– US 10-YR 2.921% (down -0.02)

– US 30-YR 3.207% (down -0.014)

Volatility

– VIX 19.60 (down -2.10%)

Crypto (1:00 PST)

– BTC $10,079.00

– ETH $813.44

– BCH $1,213.83

– LTC $196.87

Metals

– Gold $1,333.20 up 0.08%

– Silver $16.585 down -0.19%

– Copper $3.234 up 0.59%

Energy

– Oil $62.63 up 1.54%

– Brent $66.22 up 1.22%

– Nat Gas $2.617 down -1.58%