Spinning the Sector Rotation Wheel

Money is clearly on the move, rotating from sector to sector. As Treasury yields rise, some interest-rate-sensitive stocks are on the chopping block, as well as certain high-yielding stocks. But that is an oversimplified analysis of the current situation. This market adheres to certain guidelines of sector rotation, and ignores others.

For example, the damage in utilities stocks has been profound over the past week. According to sector rotation theory, utilities should rally early on in the bull market and then fade as the rally enters its mid-to-latter stages, due to rising interest rates. On the other hand, financial stocks are interest-rate sensitive, but show no signs of a breakdown as of yet. That may because they were hammered so badly over the past few years, and are not yet perceived to be fully valued....382 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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