In his weekly update, Jurrien Timmer, Director of Global Macro, notes that ten-year U.S. Treasury yields are near where they were pre-pandemic. COVID-19 vaccinations have increased, and hospitalizations have decreased. In the U.S., another $1.9 trillion in stimulus is expected, bringing the total to over $5 trillion, and the 2021 reconciliation process starts after this bill, in the form of Build Back Better, which will bring another $4 trillion in stimulus measures. Jurrien notes that commodities are on fire right now: that makes sense, as part of the reflation narrative. A rotation is happening in which we are seeing a shift from U.S., large-cap and growth stocks to international, small-cap and value stocks.

Recorded on February 22, 2021.