In the past rising bond yields has worried the high growth / high valuation names such as IT with both 2018 and this year standout examples. However the local sector is not taking any solace from the current period of consolidation after Q1’s strong rally, it feels like markets have fully embraced the value over growth theme that has been playing out through 2021 and any deviations from this the path are being faded, our concern is that once the current consolidation does complete yields will take another leg higher increasing the headwind for high valuation IT stocks.
MM is bullish US bond yields medium-term
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