So far this year, there’s been a rotation out of Cyclicals and into Defensives, with the relative performance of Cyclicals ex Tech back to where it was at the end of Aug, despite the equity rally. Per ASR, sectors like Autos have gone from being the 3rd best performer to the 3rd worst performer this year. Defensives like Healthcare, Tobacco, Telcos, Utilities, Beverages, Food Producers and Food Retail have outperformed in 2024.
More folks are putting on hedges this week, with demand for downside protection increasing as vol increased.
Per Bloomberg, Atlanta Fed Prez Bostic is doubling down on his view that the Fed should be cautious and slow about rate cuts. He talked about risks from unpredictable events like elections to global conflicts. More FedFolks are giving their opinions today. BofA shows that the Fed is still driving markets, thus so far in 2024, earnings season has mattered…but Fedspeak and Fedaction are the top dogs.
After rising for a couple of weeks, mortgage rates fell to their lowest level since May. Speaking of rates, I loved this BBG chart. The US yield curve has been negative since Oct 2022.
Google started shedding people and services in the past few weeks. Now Amazon announced more layoffs, now in their Buy with Prime area, per CNBC.
In the EZ, the EU antitrust regulator is expected to block Amazon’s proposed acquisition of iRobot, per CNBC.
Remember we reported on strong retail here in the US earlier this week? Well, it’s the opposite across the pond. UK retail sales fell at the fastest pace since the pandemic lockdown 3 years ago, per the FT. In another story, BBG reported on the falloff of Chinese travelers/spenders. China’s network of intl airline routes shrunk by -43%, with 45 destinations not served by direct flights at all. $129bn has been cut from global tourism because of the Chinese pullback. What caused this? Focus on local tourism. Soft consumerism. Xi pushing geopolitics. For example, there are 70% fewer routes to Taiwan than pre-pandemic.