Like the Four Tops sang, its the Same Old Song for markets: oil prices, rising yields and SI driving things, and to be honest the playlist is getting old. From an equity market perspective, we continued to see some impact from portfolio rebalancing. The week got off to a positive start with equities extending the gains from late last week as breadth improved. The S&P 500 hit a new all-time high on Tuesday. For the week the S&P 500 ended up ~1% closing just over 7,800. The equal-weight version outperformed up ~1.5% breaking its 7-week losing streak. Small caps, which are more impacted by the high interest environment, underperformed closing slightly lower but off the worst levels for the week.

The FT ran a controversial story on OpenAI's ARR, which impacted the entire AI/SI complex. 8 of 11 sectors ended the week up >1%. Info tech was down ~0.5% for the week given the outsized exposure. Global yields were mixed, with US rates ending modestly lower. Treasury 10 and 30y stabilized after big gains the last two weeks, while 2y yields extended last week’s modest pullback. Late in the trading day on Friday President Trump announced a deal with Russia to provide its diesel in return for a temporary easing of sanctions. For the week December Brent crude was up ~2% while Nov WTI rose 1%. Crude initially fell on the diesel news but quickly recovered most of the drop.

Next week the key economic data will be the inflation data and retail sales on Wednesday and Thursday. The IMF World Bank Meetings begin on Monday with Fed Chair Warsh expected to speak at the end of the week. It is also the “official” start of earnings season with major banks starting to report on Tuesday so hopefully this can take some of the focus off the macro. Have a great weekend!