The Great Rotation

Long end of the yield curve is starting to look more attractive:

“In institutional business, in the fourth quarter, we actually saw institutions selling equities and buying bonds, especially the long end of the curve. This is why when people were talking about the rally in December, it was really generated by this rebalancing mechanism. We are seeing companies who had such large profits in equities needed to ask themselves do they want to have such a high percentage in asset allocation in equities and the answer was that they need to be a little more balanced, so they sold equities and bought more bonds.” (CEO Larry Fink, BlackRock)

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