Stocks across the globe were generally lower this week but remain firmly in positive territory for the year. Over the past few days, we saw a reversal in recent trends as large cap stocks outperformed small caps, and growth outperformed value. Domestically, investors continue to grapple with rising inflation expectations and the implications for bond yields. On the international front, German lockdowns and further concerns regarding the efficacy for AstraZeneca’s COVID vaccine are weighing on the minds of investors. In Washington, Treasury Secretary Yellen and Federal Reserve Chairman Powell concluded their second day of congressional testimony. The two agreed that current market valuations did not point to a sudden surge in inflation, while also noting that the economy remains on track toward recovery. In economic data, existing home sales came in softer than expected for the month of February, but still up an impressive 9.1% year-over-year. Durable goods orders also fell by more than expected, attributable in part to the decline in shipments caused by severe winter weather in Texas. Bond yields stabilized this week, with the yields on the 2-year and 10-year Treasury notes trading around 0.15% and 1.64% respectively mid-week.

Source: GSAM, CNBC, JPM, Bloomberg, FactorInvestor

 

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