S&P 500 futures were flat this morning after the index closed up strongly on Friday by 1.97%. Markets in Asia and Europe were strongly up this morning. The STOXX Europe 600 was up 0.27% in early trading; Japan\u2019s Nikkei 225 was up 3.89%; and South Korea\u2019s KOSPI was up 4.1%. Even gold is now back above $5,000.<\/p>\n
It would be nice to think that this is the start of a sustained global rally in equities.<\/p>\n
But don\u2019t get too comfortable: The S&P has been a roller-coaster all year, and Wall Street analysts don\u2019t expect it to end anytime soon. Every time stocks take a step back in reaction to bad news, a relentless wave of buy-the-dippers has sent them back upward again. And every time stocks have rallied, an equally relentless wave of skeptics has pared those gains.<\/p>\n
The shape of this chart of the year-to-date performance of the index tells you all you need to know:<\/p>\n
Unsurprisingly, the VIX \u201cfear\u201d index (which measures volatility) has also been on the rise all year:<\/p>\n
Gold is supposed to be a safe haven, but anyone who bought it at the end of January was stung by it:<\/p>\n
And the Goldman Sachs \u201cPanic Index\u201d\u2014yes, that\u2019s a real thing\u2014hit 9.22 out of 10 on Thursday, indicating \u201cmax fear\u201d among investors, according to Bloomberg.<\/p>\n
This \u201cviolent volatility\u201d is being driven by investors who want to get out of software stocks\u2014which they believe are vulnerable to being replaced by AI agents\u2014and into almost any other industrial sector, according to Deutsche Bank.<\/p>\n
The software companies in the S&P 500 fell by 7.75% last week and are down 15% over the past two weeks, Jim Reid and his team at Deutsche Bank told clients this morning. \u201cThe Magnificent Seven also endured their worst week since last April, falling \u20134.66% (+0.45% Friday) with Amazon down \u20135.55% on Friday\u201d; $400 billion in market cap was wiped away, according to Axios.<\/p>\n
Yet the S&P remains less than 1% from its all-time high.<\/p>\n
You can see that rotation in this chart, which compares the S&P 500 to a notional \u201cequal-weight\u201d index, which ignores each company\u2019s market cap in order to treat all stocks equally. The real-world S&P is being held back by the decline of tech stocks, but all the other stocks in the index are doing quite well:<\/p>\n
\u201cThe equal-weighted S&P 500 even hit a fresh record, rising +2.13% (+1.88% Friday), underscoring how widespread the rotation trade has become,\u201d Reid et al. said.<\/p>\n
The Dow Jones industrials\u2014which are also less swayed by tech stocks than the S&P\u2014closed above 50,000 for the first time ever last week. Ed Yardeni of Yardeni Research was pretty happy about that. \u201cWe are still forecasting DJIA at 70,000 by the end of the Roaring 2020s,\u201d he told clients in a recent note.<\/p>\n
Here\u2019s a snapshot of the markets ahead of the opening bell in New York this morning:<\/p>\n
Source: RhinoEasy News<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" S&P 500 futures were flat this morning after the index closed up strongly on Friday by 1.97%. Markets in Asia<\/p>\n","protected":false},"author":1,"featured_media":1411,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[9],"tags":[],"class_list":["post-1412","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/posts\/1412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1412"}],"version-history":[{"count":0,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/posts\/1412\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=\/wp\/v2\/media\/1411"}],"wp:attachment":[{"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rhinoeasy.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}