Rotation in equity markets may have further to run

While equity markets came under pressure towards the end of the month, they generally weathered February’s roughly 30bp rise in the 10-year US TIPS yield quite well, with most major indices still rising slightly over the month as a whole. A more interesting development has perhaps been the further “rotation” in stock markets away from those sectors which led the charge for most of 2020, and towards many erstwhile underperformers. One aspect of this rotation has been how “value” stocks in the US have reversed a small part of their earlier underperformance relative to “growth” stocks in recent weeks.