1. October FedWatch
October rate hike expectations fade.
After reaching as high as 53% yesterday following CPI, the probability of a hike has dropped below 30% amid a strong rally in Treasuries and dovish Fed pushback.
2. Tech vs. ex-Tech positioning.
MCG & Tech positioning has started to cool, but the trade remains crowded compared with the rest of the market. $S&P 500(.SPX)$ $NASDAQ 100(NDX)$ $Technology Select Sector SPDR Fund(XLK)$
3. Hedge funds vs. AI
Yesterday, global AI stocks saw the second-largest net selling of the past year, behind only the Situational Awareness blow-up in July. Long sales outpaced short sales 3.5 to 1.
4. New Era vs. Old Era sectors
Maybe, unlike in 2000, any contemporary New Era stock price collapse won't be nearly as bad for the overall stock market because the price-beta of Old Era stocks is currently ZERO!
5. Tech rotations
How long do rotations out of Tech last?
DB says since mid-2024 the average is 67 days and the median 59 days, and on average the mega-cap growth and tech cohort sees a -16.6% drawdown (median -14.6%), so we're still relatively early in this rotation if that's what we're seeing.
Markets are always moving - and sometimes, the best move is knowing what works for you.
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