Getting Hot in Here – And not the “everything is on fire” type of hot but rather the beads of sweat/clammy hands iteration. Trying to pick out the S&P “leaders” today was like trying to spot a chameleon as it was a sea of red, not one sector flashing green and it wasn’t really close. To say there was a fair bit of carnage would be appropriate as the Nasdaq had its 2nd day of more than 2% losses in 4 and while the last two days saw selling abate as the day progressed, that hasn’t been the case thus far. Semis and homebuilders are two of the “standouts” while the WFH stocks also get shellacked. Monthly rebalances could’ve been something to point to as portfolios looked to correct the outperformance of stocks month to date, but that would fly in the face of what we’ve seen from the bond market today (more below). Interestingly, today’s selloff comes just as bears looked to be in the fetal position, the AAII survey suggesting they’ve practically given up. The chart below was triggered from the move on Monday and highlights current market volatility; pretty rare and possibly worrying.
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