WS #15949
Despite a scorching 6.3% PPI print, the long bond rallied 13 basis points and the Dow outperformed the Nasdaq, indicating that the market is prioritizing energy supply risks over inflationary pressure. Small-cap stocks have slid into correction territory as capital rotates into defensive staples and Treasuries, suggesting a loss of confidence in the broader economic growth outlook amidst geopolitical uncertainty.
Inflation vs Growth Rotation
Despite a scorching 6.3% PPI print, the long bond rallied 13 basis points and the Dow outperformed the Nasdaq, indicating that the market is prioritizing energy supply risks over inflationary pressure. Small-cap stocks have slid into correction territory as capital rotates into defensive staples and Treasuries, suggesting a loss of confidence in the broader economic growth outlook amidst geopolitical uncertainty.