July 20, 2021
The S&P 500 held technical support in the 4200-4250 range yesterday, supporting our inclination to add cyclical/value exposure on the pullback. Before we can do that, we want to see a sustained steepening in the yield curve. Our primary indication would come from the 5/30-year Treasury yield spread maintaining levels above ~120bps. We’re encouraged by curve steepening today that takes the 5/30 year spread to 119.6bps.