The second positive for equities is that higher rates rotate money from Treasuries to equities and a higher US$ also makes US assets attractive to foreigners.
The NQ8 bounced yesterday, but without any real conviction. They are still close to their neutral zone.
Small caps are also right at their neutral zone.
It is interesting to note that utilities are attracting some money. Is this a sign that interest rates will stop rising? I doubt it. It is simply a rotation out of US Treasuries. I do not believe that XLU can gain much, even though the sector attracts income investors.
XLE looked toppy yesterday. However, oil is still in an uptrend.
Finally, the weakest sector seems to be Biotech.
Conclusions:
I was expecting a much stronger bounce for the NQ8 stocks. I think that NQ8 will decide the future of this market.
