SPY
Stock futures tick lower after S&P 500's best day since June
- Volatility may be making a comeback on Wall Street as stock index
futures fell back overnight, down about 0.5%, following one of the best
days since June.On Monday, the S&P 500 climbed 2.4%, the DJIA tacked on
another
2%, while the tech-heavy Nasdaq Composite jumped over 3% after shedding
4.9% last week. The 10-year U.S. Treasury note yield, which is keeping
investors on edge, also slipped to a session low of 1.41% before drifting
toward the flatline.
- Cyclical sectors like energy and financials are also continuing to
outperform the broader market due to optimism about vaccines and economic
resurgence, though some are cautioning the rotation is overdone. "The
value
side of the equation - the 'go outside' trade - has really moved way too
far and way too fast for where we are at this stage of the reopening,"
said Amanda Agati, who oversees $170B in assets at PNC Financial. "We've
seen this massive sentiment shift, but at the end of the day, we really
haven't seen the underlying fundamentals improve in a big way." She's
putting her money in 2020's winners, like the stay-at-home trade, which
includes Big Tech.
- "Everyone's chasing their shadows and saying it's rates here, it's
inflation there. But those just aren't real," added Mike Dowdall, a
portfolio manager at BMO Global Asset Management. Monday was a "kind of a
reckoning with the reality that the Fed's not moving anytime soon. It's
really hard to paint a negative picture of this market."
- Others are flashing warning bells. SA contributor Mott Capital
Management said now is not the time to buy the dip, nor should the recent
rally last or be trusted. "The rise in real yields has massively
underperformed the rise in 10-year Treasury rates. That has resulted in
breakeven inflation rates moving sharply higher, which has helped send
the
wrong message overall to the equity market. But as real yields begin to
play catch-up to the nominal 10-year rate, it's likely to push those
breakeven inflation rates lower, resulting in equity prices following
lower, causing massive volatility."
|Today, 5:43 AM|1 Comment
Stock futures tick lower after S&P 500's best day since June
- Volatility may be making a comeback on Wall Street as stock index
futures fell back overnight, down about 0.5%, following one of the best
days since June.On Monday, the S&P 500 climbed 2.4%, the DJIA tacked on
another
2%, while the tech-heavy Nasdaq Composite jumped over 3% after shedding
4.9% last week. The 10-year U.S. Treasury note yield, which is keeping
investors on edge, also slipped to a session low of 1.41% before drifting
toward the flatline.
- Cyclical sectors like energy and financials are also continuing to
outperform the broader market due to optimism about vaccines and economic
resurgence, though some are cautioning the rotation is overdone. "The
value
side of the equation - the 'go outside' trade - has really moved way too
far and way too fast for where we are at this stage of the reopening,"
said Amanda Agati, who oversees $170B in assets at PNC Financial. "We've
seen this massive sentiment shift, but at the end of the day, we really
haven't seen the underlying fundamentals improve in a big way." She's
putting her money in 2020's winners, like the stay-at-home trade, which
includes Big Tech.
- "Everyone's chasing their shadows and saying it's rates here, it's
inflation there. But those just aren't real," added Mike Dowdall, a
portfolio manager at BMO Global Asset Management. Monday was a "kind of a
reckoning with the reality that the Fed's not moving anytime soon. It's
really hard to paint a negative picture of this market."
- Others are flashing warning bells. SA contributor Mott Capital
Management said now is not the time to buy the dip, nor should the recent
rally last or be trusted. "The rise in real yields has massively
underperformed the rise in 10-year Treasury rates. That has resulted in
breakeven inflation rates moving sharply higher, which has helped send
the
wrong message overall to the equity market. But as real yields begin to
play catch-up to the nominal 10-year rate, it's likely to push those
breakeven inflation rates lower, resulting in equity prices following
lower, causing massive volatility."
|Today, 5:43 AM|1 Comment
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