Rising yields and an AI hardware scandal pulled all twelve sectors lower together
When long-term yields rise 13-14bp in a day and not one sector finishes higher, owning a spread of sectors did not protect anyone. What held up were businesses with fee income or real commodity cash flow.
Every sector fell: 0 of 12 closed higher, and the gap between best and worst was 3.33 points. Utilities (-3.80%), Real Estate (-3.18%) and Materials (-2.65%) did worst, while the 10-year Treasury yield rose 14bp to 4.39%.
Since the last briefing
Yesterday the committee argued that energy was holding up alone while metals, consumer and staples fell and short-term yields rose, and it leaned 60/40 toward a Stagflation Squeeze.
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.