Tech stocks gaining ground again

Helped by small decline in real yields

Chart of the Day

There’s been some concern that the equity market rebound might run out of steam if the giant tech stocks did not join in, and those concerns should have been reduced yesterday after the S&P 500 tech sector outperformed most other sectors with a rise of 1.8%, vs the overall S&P 500 rise of 1.0%. The sector may have been helped by the modest fall in real yields yesterday, though the relationship between the sector and real yields will have to decouple if the tech sector is too progress much further. For that to happen, earnings growth will need to remain strong even as the world moves back to normal “offline” living.

Macro

A less impressive result from the Chicago Fed activity index in April, which does not point to anywhere near as strong GDP growth as the PMI surveys.

Turkey’s tourism numbers remain very weak.

Markets

Non-commercial traders increased their net short position in the USD last week.

Of the main US indices, non-commercial traders are currently most short the Russell 2000.

Are traders losing favor in commodities? They cut several positions last week, especially lumber and now hold a big net short.

It’s been more of a mixed picture this last month.

Following the big rebound yesterday, traders will be watching to see if oil can rise out of its recent trading range as demand recovers.

The S&P 500 has generally outperformed the other advanced economy equity indices in the past few trading sessions, causing their relative performance to lag.

Implied volatility is down across the board though.

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