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Events · who it helps and who it hurts

Treasury quarterly refunding announcement

The Treasury announces how much long-term debt it will sell over the coming quarter.

Not on our calendar

The reads below are for when the Treasury plans to sell more debt than expected. Expect the opposite when the Treasury plans to sell less than expected.

Sectors

Financial ServicesUsually helpsBanks earn more when long-term rates rise.
Real EstateUsually hurtsProperty values fall when long-term rates rise.
TechnologyUsually hurtsMore government borrowing pushes long-term rates up, weighing on growth-priced tech.
UtilitiesUsually hurtsUtilities trade like bonds and fall with them.
Basic MaterialsLittle effectLittle direct link.
Communication ServicesLittle effectLittle direct link.
Consumer CyclicalLittle effectLittle direct link.
Consumer DefensiveLittle effectLittle direct link.
EnergyLittle effectLittle direct link.
HealthcareLittle effectLittle direct link.
IndustrialsLittle effectLittle direct link.

Where each sector’s relative strength sits this week is on the rotation board.

Industries that behave differently from their sector

Banks - DiversifiedUsually helpsBig banks earn more when long-term rates rise above short-term ones.
Banks - RegionalUsually hurtsSmaller banks hold long bonds that lose value when long-term rates jump.
REIT - MortgageUsually hurtsMortgage holdings lose value when long-term rates rise.
Residential ConstructionUsually hurtsMortgage rates follow the 10-year bond.

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