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  • Scott Poore, AIF, AWMA, APMA

Rotation Among Asset Classes and Sectors

There was a shift in the leading sectors and asset classes last week as tech and AI-related names under-performed.

Small and Mid-cap stocks out-paced Large Cap stocks last week and all sectors were higher, except for Tech, Consumer Cyclical, and Communication Services. This kind of rotation is typically healthy for bull market cycles. In fact, analysis done by noted hedge fund manager, Ray Dalio, suggests the US equity market is not close to a "bubble" just yet. The Mag 7 stocks are seeing some softening as top executives have been taking profits in the elevated stocks.


On the economic front, Consumer Credit came in much stronger than anticipated for January, showing the consumer is still spending.

One reason for the strong consumer is the healthy job market. The Jobs Report last week showed that 275,000 jobs were added and Jobless Claims were as expected. In fact, though the Unemployment Rate did tick higher to 3.9%, it is still below the historical average of 5.7%. Inflation data is on deck this week in the form of CPI & PPI releases. If the February numbers come in higher or lower than expected, it could make for uneven trading this week. It has been at least 10 weeks since we have seen a 5-day decline of more than 1% on the S&P 500. A pullback at this point would certainly be expected.

 

Disclosures


The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.


Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.


Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.


Past Performance does not guarantee future results.

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