The materials sector hangs tough once again, but some underlying weakness could make the bounce temporary. That’s three consecutive weeks of the defensive-minded utilities sector outperforming the S&P 500, more than enough to flip this short-term signal to risk-off. Dividend stocks mirrored the pullback in cyclicals last week, but still look to be in pretty good shape overall.

TIPS are getting swept up in the current Treasury bear market, although they’re managing to fall less than the broader government bond market. Riskier debt is flat overall on the year, but the group is still outperforming Treasuries by about 350 basis points. A minor pullback in the dollar index last week, but the greenback is still looking pretty firm here.

Passage of the new stimulus bill in the Senate over the weekend secures the notion that the global recovery will continue to progress, while steadily rising oil prices act as an additional catalyst. As long as we keep hearing chatter about the future of inflation, we’ll likely see forces continue to want to push interest rates higher. Tech and growth stocks continue their correction as investors rotate into cyclicals with confidence that the recovery is coming.