Wall Street Bets on Pair Trade That Favors Consumer Over Housing

As investors in US stocks shift their attention from easing trade tensions to the threat of rising bond yields, two big Wall Street trading desks recommend taking advantage of both.

At UBS Group AG and Goldman Sachs Group Inc., the trade is twofold: Buy consumer stocks, which will continue to outperform as the Trump administration ratchets down its tough talk on tariffs and presses retailers not to raise prices. And simultaneously, bet against interest-rate sensitive corners of the market, such as housing, as concerns over debt and the US federal deficit push Treasury yields higher.

Optimism over easing trade ...