Stocks have been turned on their head

Wall Street’s resilience on the idea that higher interest rates will drag on stocks has led to the most dramatic uptick in the U.S. rate outlook in decades.

Notably, the sectors most sensitive to higher borrowing costs — tech, Nasdaq, and growth stocks — have outperformed rising bond yields amid rising default rates and Fed expectations.

For example, the correlation between ‌Nasdaq and U.S. bond yields has been negative over the past two years. But that has completely changed, and the Nasdaq’s 25-day simple moving average correlation with U.S. two-year and 10-year yields is now at its most positive since last April.

The latest retail sales statistics show that the USA economy is doing better than most expected. The recession people thought would happen hasn’t come, and people are wondering if it will.

Earnings expectations for S&P 500 companies have fallen to zero this year, which Miran believes could bounce back if growth stalls. And next year, consensus forecasts now call for earnings growth of nearly 12.5%.

Market positioning is also a factor. Investors’ exposure to U.S. stocks at the start of the year was very low, with fund managers underweighting U.S. stocks for the most part since 2005.

JP Morgan’s Marko Kolanovic estimates that the two-year return since the Fed meeting should see the Nasdaq sell off 5.3% to 10.5%, which has risen 3.52% since then.

Most Adani Group stocks rose

Most Adan Group shares rose in early trade as the conglomerate sought to woo investor loyalty after a short-seller onslaught wiped out billions of dollars in investor wealth.

Adan Green Energy has a refinancing plan that the company will unveil after the end of the fiscal year; an Adan Group executive told bondholders on a call Thursday.

Shares of Adan Green rose 3.4% on Friday after losing nearly 71% following a January 24 report by U.S. short-seller Hindenburg Research. Adan Power grew by 5.3%, and Adan Ports and Special Economic Zone slightly more.

The conglomerate’s seven listed companies have collectively lost about $125 billion in market value after Hindenburg alleged the group misused offshore tax havens, manipulated shares, and expressed concern over its high debt levels.

Adan Green Energy bonds due 2024 and offering a 4.374% coupon, rose to 84.6 cents on the dollar on Thursday from 74 cents a day earlier.