— Pratyush Tulsian (@PrattyCharts) January 7, 2022
Today’s Chart of the Day was shared by Pratyush Tulsian (@PrattyCharts). We’re only one week into the new year, but the 10-year US Treasury yield has risen every single day so far in 2022. As Pratty points out, the 10-year yield broke out to its highest level in nearly two years today, after basing for the past 10-months. This was easily the most important development this week, as it has been a key driver of sector rotation in the stock market. Sexy growth areas of the market like Tech, Software, IPOs, and $ARKK have taken a beating. Meanwhile, boring old ‘boomer stocks’ are loving it! Value-oriented sectors like Energy and Financials are up big to start the year. Energy is already up more than 10% in these first five trading days of the year, while Tech is down more than 4%. This breakout in yields could be a good thing or a bad thing depending on how your portfolio is positioned. As pronounced as this rotation has already been, it could continue as the 10-year hits new highs.