Image source: gs, interpretation: llm

This chart shows the performance correlation of different global industries and styles relative to the weekly changes in the U.S. 10-year Treasury yield. The bar chart represents the correlation percentages since 2010 and since 2022. A positive value indicates that when the 10-year Treasury yield (BY) rises, the sector outperforms the market average, while a negative value indicates underperformance.

Here are some key points from the chart:

1. Outperforming the market (when BY rises):

• Cyclicals: Since 2010, the correlation was 40%, and since 2022, it was 16%, indicating that cyclical sectors generally perform well when Treasury yields rise.

• Financials: Since 2010, the correlation was 28%, and since 2022, it was 27%, showing that the financial sector also performs well when Treasury yields rise.

• Value: Since 2010, the correlation was 24%, and since 2022, it was 31%, indicating that value stocks perform well when Treasury yields rise.

• Energy: Since 2010, the correlation was 21%, and since 2022, it was 28%, showing that the energy sector also performs well when Treasury yields rise.

2. Underperforming the market (when BY rises):

• Real Estate: Since 2010, the correlation was -42%, and since 2022, it was -34%, indicating that the real estate sector generally underperforms when Treasury yields rise.

• Defensives: Since 2010, the correlation was -40%, and since 2022, it was -17%, showing that defensive sectors underperform when Treasury yields rise.

• Consumer Products & Services: Since 2010, the correlation was -35%, and since 2022, it was -22%, indicating that the consumer products and services sector underperforms when Treasury yields rise.

• Utilities: Since 2010, the correlation was -33%, and since 2022, it was -13%, showing that the utilities sector underperforms when Treasury yields rise.