Wednesday, 11 September 2019

Markets little changed as US investors rotate into cyclicals

Markets were mostly little changed on Tuesday.

The S&P 500 was flat, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.3 percent.

“The big story is the continuing rotation that we saw begin a couple days ago,” said Willie Delwiche, market strategist with RW Baird. “If we can actually move away from narrow, defensive leadership into cyclical and small-cap leadership, that would be a healthy development for the market.”

MarketWatch reported that over the weekend, Andrew Sheets, chief cross-asset strategist at Morgan Stanley, had written in a note that the global economy may be poised for an upside surprise.

“In this scenario, yields and inflation expectations would rise meaningfully, as markets assume less easing is needed and better days lie ahead,” he said.

Sheets added that “the market isn’t positioned” for a reacceleration in growth and that the resultant market movements “could be large”.

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