Cyclicality Should Work Under A Rising Rate Environment
A nice chart from Renaissance Macro shows the relative performance of S&P500 sectors when interest rates are rising. Since the financial crisis the prior five periods of rising yields have seen the S&P500 deliver positive returns. Even in this post financial crisis environment the market tends to favour cyclical sectors when rates rise. This is exactly what we have seen since the election and it should continue to see as rates rise.
