Market Pullback Opens the New Year

Market Pullback Opens the New Year

Douglas Cote

Douglas Coté, CFA

Head of Global Perspectives Strategies

Both stocks and bonds have gotten hit hard at the start of the year. Especially hard hit have been long-duration assets ― including 20+ year U.S. Treasurys and the high-flying NASDAQ Composite, which are down 3.89% and 3.19% respectively as of January 6. The yield on the ten-year U.S. Treasury note has jumped to 1.74% and WTI crude oil is up to nearly an 80-handle. The only asset class with a positive return is the S&P SmallCap 600 index, which is smoking its cousin the Russell 2000 index, after pummeling it in 2021 ― for the good reasons of better profitability, greater liquidity and higher quality. Don’t read anything Machiavellian into this pullback, it’s just Santa Claus taking a breather after a breathtaking year-end rally. Fundamentals are solid.

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