Tech continues to make a roaring comeback on the belief that the “healthy growth with elevated inflation & the risk of rate hikes” economy that’s existed throughout much of 2023 is transforming into “healthy growth with cooling inflation & the end of rate hikes”. Is the optimism for junk bonds warranted? I’d almost certainly say no given how credit conditions are worsening yet high yield spreads are still incredibly low.

Technology sector is driving the market higher, but the broader market is struggling. Communication services stocks are losing momentum and may struggle to maintain their uptrend. Regional banks in the financial sector are facing pressure due to higher deposit costs and exposure to commercial real estate.

Energy has been on an unstoppable tear for two straight months, but I think stocks are getting a little ahead of themselves here. A healthy U.S. economy combined with higher government bond yields and fresh uncertainties in Asia are developing a perfect storm for dollar-denominated assets. Utilities is trying to make another comeback here and this time it’s being accompanied by other more conservative strategies.