Yields are driving the stock market right now. These are the stocks with the most at stake
CNBC Pro screened the S&P 1500 to list stocks that will benefit most if yields pullback
TL;DR
- Bond yields are currently a major influence on the stock market.
- Rate-sensitive stocks are in focus as bond markets experience relief and then climb to multi-decade highs.
- Persistently elevated oil prices are a concern for inflation and have pushed yields higher.
- A Treasury Department announcement to double government debt buybacks caused yields to fall broadly on Wednesday.
- CNBC Pro screened the S&P 1500 for stocks with the highest 60-day correlation to the iShares 20+ Year Treasury Bond ETF (TLT).
- Homebuilders like Toll Brothers, D.R. Horton, Lennar, and Pulte Group showed strong sensitivity to TLT, linked to mortgage rates and housing affordability.
- Household product makers (Stanley Black & Decker, Williams-Sonoma, Floor & Decor) and discretionary product sellers are also sensitive due to borrowing costs impacting demand.
- Boat manufacturers (Brunswick) and powersports vehicle makers (Polaris) exhibited high correlations.
- Airlines, including Alaska Air, Southwest, Delta, and United Airlines, were prominent on the screen due to potential impacts on financing costs and travel demand.
- Other vulnerable stocks identified include Builders FirstSource, PPG Industries, Simpson Manufacturing, and Masco Corporation.