Quiet Rotation Today

The big jobs report comes out Friday but we got a sneak preview this morning. ADP said that the economy created 201,000 private sector jobs last month. For Friday’s report, the consensus on Wall Street is for 220,000 net new jobs.

Also, the Department of Commerce reported that the trade deficit fell to $40.9 billion in April. That was less than consensus. Bill McBride notes that exports are 14% higher than their pre-recession peak, while imports are right at their pre-recession peak.

This is an interesting day in the markets and it’s a continuation of what I discussed before; interest rate-sensitive stocks are lagging. This is a classic Quadrant I day. Industrial cyclicals are up, especially transports. The top-performing sector so far today is trucking.

What’s interesting is that the broader market is up modestly so it’s masking the dramatic rotation that’s happening under the surface.

Posted by Eddy Elfenbein on June 3rd, 2015 at 1:02 pm

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