Big Bifurcation: 10-year Treasury vs. Equal Weight Consumer Staples

Big bifurcation in momentum between the 10-year treasury yield (purple) and equal weight consumer staples (blue)! Staples are typically low volatility stocks with predictable earnings. But the rapid increase in the 10-year yield has forced a sell-off on both an absolute (top graph) and relative-to-S&P500 basis (bottom graph).

Source:

FactSet Research Systems. (n.d.). Equal weight consumer staples vs 10-year treasury yield benchmark (Interactive Charts). Retrieved October 12, 2023, from FactSet Database.

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The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.