Why Some Stocks Are More Sensitive to Bond Yields
- High-growth stocks can have long duration, pushing returns further out.
- Nasdaq is long in duration. Dow, which pays higher dividends, is short in duration.
- Higher bond yields have weighed more on Nasdaq than on Dow, Russell 2000.
- Duration is an important factor to consider when evaluating index returns.
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Top Performing Stocks Were Most Affected by Bonds
- Some equity sectors were hit hard by rising yields, others have benefitted.
- Prices of tech, telecom, and consumer discretionary stocks have retreated.
- Financials, energy stocks have gained; real estate, industrials unaffected.
- Best performing sectors were hit the hardest by rising bond yields.
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