All good things must come to an end. Yesterday, the modest winning streaks for the major indexes to start the year came to an end in the midst of rotational activity. Cyclicals, which have been outperforming, pulled back sharply while mega-cap tech outperformed. However even within the tech sector activity shifted as memory/chips sold off and software/cyber security bounced back.

The S&P 500 began today around unchanged and it hasn’t moved much since. Tech weakness is the root cause of that as every other sector but one is higher, causing the equal-weight to outperform by about 1%. Small caps are up a similar amount. Staples, Discretionary and Energy are leading. Constellation Brands earnings beat and guidance is catalyzing the Staples strength while continuing to call out a challenging demand environment. Discretionary is also strong across the board, in particular auto, travel, retailers and homebuilders. Energy is following the commodities - oil-leveraged names higher, natural gas names lower. Materials is also strong with chemicals and packaging names leading. In tech, recent strength has turned into sharp weakness today across storage names, driving the sector lower. Healthcare is sluggish with biopharma and Tools/CROs mostly lower while services and med devices are mostly higher.

The 10-year yield was slightly lower in early morning trading but moved higher along with global yields on hotter European data. The USD index is also higher as the Dollar gains on the major crosses. Oil is bouncing over 2%, recouping losses over the last two days as the US moves towards additional Russian sanctions. There’s some downside follow through in the metals complex. Crypto is mixed with Bitcoin back to flat after trading below $90k earlier while Ethereum slips 1%.