Photo: Reuters / Carlo Allegri

9 out of 10 top performers this morning on the S&P 100 were financials, led by Bank of America (+2.2%) and Citigroup (+2%). Banks like a steeper yield curve, and heavy selling overnight out of Asia steepened the yield curve handily. Short-dated Treasuries were little changed while the 10-year Treasury yield rose 5 basis points to 2.30%, the highest in five months.

The rest of the stock market didn’t seem to care much. There’s a lot of talk about the Trump tax trade returning, benefiting stocks that pay a relatively higher share of corporate taxes (mainly small-cap stocks). The Russell indices of small-cap stocks have been outperforming for the past several days and continued to do so this morning (the Russell 2000 was up 0.7%, the best-performing of the group). Take away the financials, though, and the S&P would be in negative territory for the morning. That suggests that the tax effect is marginal at best.

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