The Trump Reflation Trade is Fizzling
Steel stocks began selling off hard last week:
And the selling spread to integrated commodity behemoths such as BHP and Glencore today:
While it’s possible that this market action could be limited to the steel and iron ore sectors the recent decline in the 10-year Treasury note yield confirms that this sell-off has a much more macro growth slowdown flavor to it:
10-year Treasury Yield (Daily)
So far US equities have held up fairly well with reduced Fed rate hike expectations probably helping to cushion some of the reduced growth outlook the above charts signal. This is a theme to keep an eye on as the ‘Trump reflation trade’ is already in serious jeopardy of fizzling before we even got to know it.
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