The rotation continues. “Stay at home” stocks and safety plays are struggling as investors focus on reopening stocks.
This has lifted financials, industrials, energy and small caps. Auto stocks are also surging.
But it’s hurt high-multiple tech/e-commerce stocks.
We just wanted to share this quick screenshot of RadarScreen. It shows how these beneficiaries of coronavirus are near the bottom of their ranges and lagging in the past week. Utilities fit in the same group, mostly because they benefit from lower rates. (Rates are rising, especially longer-term bond yields.)
If this trend continues, we could be due for a “bullish pullback” in the S&P 500. A new kind of market could emerge on the other side, with less focus on the Nasdaq-100. However, the bulls may still find longer-term reasons to like semiconductors and 5G equipment makers.