Big Problems Emerge in the Market for Silver and Software

Cracks are surfacing in the Tech trade across stocks, bonds, and loans. But investors are rotating to value in a major way rather than building cash.

Key Takeaways

• The Risk-Off Trade and Volatility Have Returned: The risk-off trade has reasserted itself (and the volatility in silver is more than a tad unnerving), so raising some cash right now would not exactly be the worst thing to do. The Nasdaq looks on the verge of breaking down, even if the chip stocks are holding in relatively well. Blue Owl’s collapse can best be described as the proverbial canary in the coal mine.

• Rotation Continues as a Theme: Investors are rotating instead of building a liquidity buffer. So far, this has worked, with the S&P 500 Equal Weight index and the Value Index hitting new all-time highs, and mid-cap stocks not too far behind.

• Trump Approval Sinks on Cost-of-Living Concerns: As today’s WSJ notes in Republicans Have an Economy Problem (an op-ed piece penned by Karl Rove in the Wall Street Journal), the latest RealClearPolitics polling data show Mr. Trump’s approval rating for his handling of the economy down to a dismal 41% and for cost-of-living issues, try a mere 37%.