Leaders-Laggards

Even though the S&P 500 and Nasdaq 100 are still at all-time highs, the broadening of the market is still allowing defensive issues an opportunity. TIPS appear to be breaking out here and we could be getting the strong sense yet that investors have begun taking inflation more seriously. We may be finally seeing the re-emergence of emerging markets stocks.

Financials are proving to be one of the biggest beneficiaries of Trump 2.0. For the first time in two years, international stocks are finally building some momentum. We may be seeing a broader shift away from big tech leadership. The rally in gold seems almost unstoppable at this point. Tariffs are the one thing that has fairly consistently been supportive of the dollar, but there's been a relatively muted response from equities.

Figuring out what’s actually being valued in the AI space right now is getting tougher, but capex spending hasn’t yet been the negative that it could have been. We’ve gotten some traditional risk-off behavior this week - bonds, gold and utilities outperforming with stocks, junk bonds and small-caps underperforming. If the markets are going to turn around here in the short-term, it’s looking less and less likely that tech is going to lead the way.