Asks if the focus on tech selling off is too negative, given talk of a 'great rotation' and the S&P Equal Weight hitting a new high.
Speaker1
Michael Ryan King
Confirms a rotation is happening. Tech sector has pulled back significantly since late October, while the S&P 500 has been flat. Highlights concentration risk and concerns around AI trade spending and the SaaS business model.
Asks if there's a reset in AI expectations due to shifting views on big spending.
Speaker1
Michael Ryan King
The rotation began end of Q3 last year due to Fed rate cuts and market concern over partnership/circular financing announcements and hyperscalers tapping debt markets.
Asks if energy leadership signals a broader shift to hard assets and defensives for the year.
Speaker1
Michael Ryan King
Yes, the shift has been into hard assets expecting economic reacceleration, supported by fiscal impulse and theoretically supportive monetary policy.
Michael Ryan King
The unwind in metals moved into thematic momentum assets, and VIX is moving higher. Volatility in other asset classes can create 'air pockets' in equities.
Asks if crypto weakness is a leading indicator for equities, given the de-risking.
Speaker1
Michael Ryan King
Crypto weakness indicates risk sentiment is 'hunkering down'. Assets are oversold with no bounce, suggesting ongoing de-risking and deleveraging.
Michael Ryan King
From an equity perspective, watching 6800 on the S&P 500 as a key technical level (50-day, 100-day, previous Jan/Nov lows).