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Bond Rout Is Reviving Quant Value Trade in Best Year Since 2016

  • Rising yields are helping to rekindle faltering reflation bets
  • Energy rally also adds tailwind to cheap and cyclical stocks
Value has tended to track bond yields over the past year

A rout across the bond market is fueling a comeback for risky stock strategies as traders ride the economic reopening in the grip of the energy crunch.

As Treasury yields march higher for a fourth day, a market-neutral trade that goes long value stocks and shorts their more-expensive peers is set for another strong performance after posting the best gain since March on Monday.