Rotation Response… There’s been plenty of questions as to whether the Rotation trade’s recent “pause for thought” was turning into something more sinister, as yesterday’s action suggested conviction could be waning. But at least for today markets are back in familiar form, with Cyclicals (Energy, Transports, Cap Goods) leading the way higher TMT (Tech, Media, Tesla) act as a drag on the Nasdaq. More booming eco data is helping drive the reopening narrative (more below) and of course Treasury yields behaving is helping to keep things civil – better demand on today’s 5-year auction assuaged any immediate fears of a repeat of last month’s lackluster 7-year auction that seriously spooked investors. Crude has continued to recover most of yesterday’s plunge despite word that traffic through the Suez Canal should resume flowing today or tomorrow. S&P Semis are managing to stay in the green despite lukewarm reception for Intel’s (INTC -0.5%) plans to expand its manufacturing capabilities.
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