Markets rise as amid signs of rotation to cyclicals

Markets rose on Monday.

The S&P 500 rose 0.3 percent, the STOXX Europe 600 rose 0.3 percent and the Shanghai Composite rose 0.8 percent.

However, the Nasdaq Composite fell 0.4 percent amid signs of a rotation towards more economically sensitive cyclical stocks.

“As the summer COVID-19 spike wanes, investors are more inclined to view the economic recovery as real. That could mean the recent move toward cyclical stocks is real and sustainable for the first time since the pandemic began,” said James Meyer, chief investment officer at Tower Bridge Advisors.

JPMorgan Cazenove was more skeptical on the move to cyclicals.

“For Cyclicals and Value to work from here, one needs to see a continued acceleration in the PMIs. We think this is unlikely,” JPMorgan’s Mislav Matejka wrote.