A broad relief rally lifted high-beta names while bonds and defensive compounders were sold
The session rewarded risk appetite rather than quality, so an equity holder should read the rebound as a pause in the risk-off move, not proof that yesterday's worries were answered.
Stocks recovered broadly: 10 of 12 sectors rose, led by Consumer Discretionary at 1.65%, while Consumer Staples fell 0.64% and Energy was flat at -0.03%. Treasuries sold off alongside the rally, with 2Y to 10Y yields up 3-4bp.
Since the last briefing
Yesterday the committee called the Mideast selloff broad risk-off rather than a confirmed energy shock, and said bonds were not shelter.
What drove the session and how it transmitted, the exposure table by persistence grade, where the committee disagreed, its verdict and weighting, and the falsifiers that would prove it wrong.