Sector behaviour in the global markets is currently unusually divergent.
Key cyclical sectors across the globe are making new highs: UK & US airline sectors, for example, have rallied sharply in recent trading sessions to new multi month highs; the UK’s FTSE basic materials sector is at new multi-year highs, while the global banks sector is almost 15 per cent higher in February alone.
In contrast key tech leadership stocks are behaving poorly, with some troubling recent price action – Apple, for example, peaked on 25 January and has been rolling over since then; Tesla is almost $200 off from its recent high and down sharply in the past two trading sessions. Second line tech stocks are also starting to perform poorly (e.g. the Churchill Capital Corp SPAC which was down 38 per cent yesterday). Increasingly it’s a market of two halves.
Key events today include Jerome Powell’s second day of testimony on Capitol Hill. His speech should be the same as yesterday. What will be interesting will be the Q&A session. Over and above that his key deputy, Richard Clarida, will be speaking twice later today on the ‘US Economic Outlook and Monetary Policy’. Key macro data includes the US new home sales data (out at 3pm London time).