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Weekly Memorandum 6/21/2021

Stocks are mixed to start the week, but we saw a notable shift in capital flows within equities over the past week or so. There appears to have been a reversion back from the inflation-sensitive and value sectors of the market into technology and growth. This speaks to the potential rising deflationary pressures within markets, and typically, it leads to an outperformance by growth. We saw nasty down days in both the S&P and Dow, while the Nasdaq continues to trade near its all-time highs.

Bonds finished mixed last week too, as we saw the yield curve flatten after the Fed's surprisingly hawkish rhetoric. The key is to recognize that it is highly unlikely that they would touch short-term rates without first beginning to taper their QE program.

Crude Oil hit a new multi-year high last week, but gave back some of the gains by Friday. Precious metals suffered strong declines, and so did cryptocurrencies. The grain markets took a beating too, while the livestock markets held up a bit better. This was likely exacerbated by the U.S. Dollar finally seeing a strong bid higher.

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