January 252, 2021
The near-term dynamic in bond yields is creating a pullback in cyclical and value sectors. We see the pullback as an opportunity to add cyclical/value exposure, specifically in Financials, Industrials and Materials. The market is not positioned for a vaccinated/normalized economy in 2021 and pro-cyclical groups have a lot of room to recover. We’ll be adding exposure when 10-year yields reach ~1.00% or when individual positions reach short-term oversold levels.