Since the beginning of the year the yield on the 10year note has seen a decline from (3.036%) to a low of (2.579%) of February 3, 2014. (Currently around 2.644%)
This seems to be taking its toll on the financial sector and in particular the insurance stocks. They have been under performers this year so far with names like AFL, HIG, MET and PRU all down more than the S&P 500. Lower rates are a negative for these companies as it hurts their earnings. So if rates continue to fall, coupled with a weaker overall market the insurers could be hit with a double whammy.
We will keep an eye on these names and the overall financial sector and see if yields continue to head lower.
Parm Mann
Elite Round Table
