Summer Snooze… A busy weekend of news but a somewhat sleepy response from the US equities feels about on par for mid-August, especially as earnings wind down. Futures hanging in the green this morning despite the continued simmering of US/China tensions shows the saga remains in the backseat relative to the virus recovery story, but Tech continues to show signs of fatigue just as its carried the S&P to within a stone’s throw of its all-time high. Accordingly Software, Media, and Semis have been among the worst performing sectors throughout the morning, and are responsible for the S&P’s brief foray into the red (Nasdaq still lagging there). That’s left investors to once again rummage around the value/cyclical bin with Transports, Industrials, and Banks all outperforming along with Energy which is getting a boost from Crude strength after Saudi Aramco presented an upbeat picture of improving demand. Small-caps’ mojo has also rolled over from last week’s performance that saw the Russell 2000 gain +6% (IWM +1.2% today) and clear the crucial June high. Still, perspective is important, and despite the signs of rotation over the last 2-3 weeks it’s too early to say the longer trend of growth/Tech outperforming the S&P while small caps/Value underperform has seen any meaningful change. See the chart of Nasdaq 100 and Russell 2000 Value Index both relative to S&P below:
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