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The Mag 7 Is Masking a Bear Market, and the Speed of Higher Rates Is the Culprit
The indexes are at all-time highs, but what's happening underneath the hood is quite different. The Mag 7 is masking what looks a lot like a bear market in everything else. The culprit, in my opinion, is the combination of higher rates and the sheer speed at which the 10-year has climbed to a 24-year high. When yields spike this quickly, the sectors that live and die by interest rates get hit first, and that is exactly what we are seeing in financials as the yield curve flattens, in debt-heavy industrials, and in the classic rate-sensitive corners like REITs and utilities. Look at the XLU or…
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