Treasury Yields Knife Below Key Technical Levels

Cyclical stocks are getting crushed while defensives hang on

Highlights

• Germany’s new chancellor seeks higher defense spending

• Cyclical stocks are getting crushed while defensives hang on

• Buying the dips isn’t working well any more

• Canadian dollar rally ends amid renewed tariff fears

Key Takeaways

• Tariff Fears Block Equity Market Recovery: Yesterday’s action was fascinating. We were supposed to see a recovery from oversold conditions. That didn’t happen. Squishy soft data out of the Chicago and Dallas Fed got in the way. So did the President. Donald Trump gave a strong indication that the tariffs on Canada and Mexico are set to begin next week (the loonie’s rally hit a brick wall and has sold off to C$1.4266 — the last time the tariff fear hit its highest level nearly a month ago, it tested C$1.48).