Risk-on assets ruled for the week, but it looks like there’s still a desire among investors to position themselves into the perceived leaders during economic slowdowns. Discretionary stocks have been severely beaten down and it’s not surprising the group was ready to pounce at the first sign of positive news. Even as rates remain volatile, there’s an uptrend building here for bonds relative to stocks.

The rise of consumer staples shows that positive defensive behavior hasn’t fully evaporated despite the fall of utilities. Investors could be reaching the point where even though yields may not have topped, the safety of Treasuries is the more important factor. High inflation and a hawkish Fed served to reignite a rally in the dollar again.

Utilities outperformance is starting to get a little long in the tooth here. Bear markets typically see riskier small-caps underperforming the S&P 500, but that’s not what we’re seeing here. International stocks have modestly outperformed the S&P 500 as investors could be searching for better relative value. The Treasury sell-off is accelerating again.