Stocks in March acted much like they did in February, starting off the month very strongly then stalling out a bit mid-month and seeing some weakness towards month end. Maybe this advance is just getting a little ‘tired’ after passing the one-year anniversary of the March 23rd, 2020, lows, but the investor ebullience of the post-election period has clearly faded. The biggest difference between the past few months and most of 2020 has been the change in leadership to the more economically sensitive stock groups and away from the technology, growth and ‘stay at home’ names that were the big winners last year. A long overdue recovery in the financials, basic materials and energy sectors has been somewhat offset by weakness in the Apple’s, Amazon’s, Zoom’s and Tesla’s of the world and leading to more muted overall gains for the S&P500, while the Dow Industrials moves to record highs and the technology-heavy Nasdaq stocks fade. Most of this trade-off is due to a sharp difference in the world of bonds and interest rates versus last year. While slow growth, massive central bank easing and zero interest rates made ‘long duration’ growth stocks the ‘go to’ choice last year, the sudden rise in interest rates and stronger economic has turned banks, energy and industrials such as Boeing, Deere, 3M and Caterpillar into the early winners thus far in 2021. (more…)