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 NASDAQ Composite Index (NASD.I) & iShares S&P 500 Growth ETF (IVW) vs. iShares S&P 500 Value ETF (IVE)

It has been a choppy week for equity markets. Earnings season has come to an end, reducing the amount of corporate news out there for investors to consider. Instead, investors have turned their focus to rising traded US interest rates, particularly the 10-year treasury yield climbing above 10%, as a sign that the massive central bank liquidity party may not go on forever.

In light of the prospects that monetary policy may eventually need to normalize, investors have started to take profits in some of the areas which had led the charge upward initially and may be priced more closely to perfection, particularly in the technology and communications sectors which dominate the NASDAQ.Meanwhile, with the rollout of vaccines in the US set to accelerate and Texas planning to fully reopen next week, the prospects for a reopening recovery continue to grow which has maintained support for commodity prices. As a result of this, capital has continued to rotate into the Energy and Materials sectors and other industry groups which been severely impacted by COVID related shutdowns.Economic conditions remain a key focus for investors this week with US nonfarm payrolls due on Friday. Next week, the spotlight turns back to central banks and their plans for monetary policy with the Bank of Canada and the European Central Bank holding meetings.

In this week’s issue of Equity Leaders Weekly, we look at yesterday’s downturn in the NASDAQ Composite Index and at a shift in the capital flows between Growth and Value stocks.

NASDAQ Composite Index (NASD.I) 

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