Chart of the Day - Friday, February 26th, 2021

Today’s Chart of the Day was shared on Twitter by Ian McMillan (@the_chart_life). The major development this week was the breakout in interest rates. This jump in rates has been driving the rotation we're seeing in the stock market. In a comment to The Chart Report, Ian said, "There's been a lot of discussion over whether or not higher rates are 'good' or 'bad' for the stock market. To me, it's not so black & white. I think the better question is - which areas of the stock market are higher rates good/bad for? Higher rates are a tailwind for Value-oriented sectors, like Financials and Energy. On the other hand, higher rates can be a headwind for Growth-ier areas that have relied on cheap(er) debt to fund said growth over the last few years. We're already seeing the impact of this sector rotation at the index level, with the Russell 2000 breaking out relative to the more Growth-heavy Nasdaq."