After a horrendous final week of February,

in which fear of the coronavirus gripped global markets,

the US stock market has rallied back

over the last four days suggesting,

at least tentatively, that investors

may be back in risk-on mode.

But let's decompose the rally.

Schematically, the red line here is the path of the S&P 500,

showing the progress of the broad market.

It has risen 5 per cent over the past four days.

Again, pretty furious progress over a short period of time.

However, look at the components of the index that

are leading the rally.

This one is managed care stocks.

These are the privately-owned healthcare stocks

that Senator Bernie Sanders had promised to eliminate.

The outstanding showing by Joe Biden in the Super Tuesday

primary polls sent those stocks roaring by 15 per cent.

The next broad leader of the market rally - utilities.

These are up 7 per cent .

Again, faster than the wider market.

What are utilities to investors?

The ultimate safe haven - high yields,

stability, a port in a storm.

Now, what is underperforming?

Let's start with banks.

Bank stocks have not risen at all over the past four days,

while the rest of the market has rallied so furiously,

as the sector has suffered a kind of double whammy.

The Fed's 50 basis point cut to interest rates

threatens to compress their profit margins.

And at the same time they are economically sensitive.

So investors worried about future growth in the economy

will sell them off.

Finally, the red line is 10-year bond yields,

which have continued to fall while stocks have risen,

and even after a little rally in the last day, still

remain near the all-time lows of a couple of days ago.

What does this mean?

Maybe several things, but none of them good.

Certainly, such low bond yields suggest

that investors are worried that the Federal Reserve, faced

with further weakening of the economy,

may have to cut rates yet again.

They also suggest no fear among investors

that growth is going to push inflation up.

What then have we seen over this period?

A rally in the stock market, but one

that has been led by political relief

and by investors seeking safety in their choice of sectors.

Economically sensitive stocks, on the other hand,

making very little progress, and bond yields

strongly indicating that investors do not

see growth ahead.

What we have in some is a risk-off rally.