It looks like we are going to get a lift this morning in the equity market that could make up for the late day fade yesterday. Half the gains on the day were given back in the last hour on the back of a comment on CNBC from the Federal Reserve Vice Chair Richard Clarida, who said it was likely the economy was going to need more monetary and fiscal stimulus. Given the incredible stimulus that has already been issued, we can see what those in the know are thinking about the economic recovery. When we look at the S&P 500 Index (SPX) it seems the market is suggesting a stronger economy, but the Fed, U.S. Treasury yields, and sector performance continue to suggest it is going to be a slow recovery. As you know, we are looking for a lift in the yield of the 10-year U.S. Treasury Bond and outperformance of the economically sensitive sectors such as the Financials and Industrials as a sign to go back on offense but they underperformed again yesterday.
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