After more than a year of steady outperformance over Treasuries, it looks like short-term bullish sentiment may be fading. Emerging markets equities are considered toxic at the moment, but emerging markets bonds have held up well. Lumber prices continue to soar along with those of other agricultural commodities, so this chart looks more ridiculous by the week.

The financial sector remains a heavily rate driven story. While the broader cyclical trade turns lower, industrials are one group that is bucking the trend. It’s been a rough couple of weeks for the energy sector.

The steady outperformance coming from utilities despite the broader market’s continued push towards fresh record highs is probably a signal that shouldn’t be ignored. Due to lumber shortages and strength in the housing market, there’s bound to eventually be a mean reversion coming. The dollar falling is consistent with what we’d expect when rates are falling and inflation is inching upwards.