Equity Markets Surge with Rate Trends: Homebuilders Lead🤝

Unsurprisingly, equity risk proxies followed the move in rates, where the US homebuilder sub index saw the biggest gains all year, jumping well over 5% on the day, where expectations of falling funding rates and a still historically tight housing market are expected to provide positive PNL tailwinds for homebuilders.The rest of the equity complex joined in on the fun, with the S&P 500 seeing a 2% rally with a 93% up-day, with every single sub-sector in the green, even with the embattled healthcare and energy sub-sectors. Furthermore, with the peak in terminal funds appearing to be in sight, and worries about unsustainable treasury supply kicked into next year (thanks Secretary Yellen!), the conventional 60/40 portfolio has seen a massive 5% return over the past-month with the synchronized rally across cross-asset classes.

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