Yields on the benchmark 10-year U.S. Treasury are on track for their biggest weekly gain since September, 2019, while technology and growth stocks have tumbled and investors snapped up shares of banks, energy firms and other economically sensitive companies.
“The Fed is serious about ending quantitative easing,” he said. “This is the year that we will start to see quantitative tightening and that will favour value stocks.” That will likely weigh on both deep value-oriented sectors like travel and energy that saw outsized gains in 2021, while at the same time hurting high-growth technology shares, he said.
Some believe the heavy weighting of tech-focused stocks in the S&P 500 could slow the broader index if those names stumbled: Microsoft, Apple, Nvidia, Alphabet, and Tesla accounted for nearly a third of the S&P 500′s almost 29% total return last year, according to data from UBS Global Wealth Management.