Coming into July, memory and storage stocks were on fire. but started to turn lower. This week they fell sharply 10-25%, even after seeing a bounce on Friday. The ICE Semis Index fell 10% and the DRAM memory ETF fell 14% this week. Those stocks were on all-time heaters so a pullback isn’t terribly surprising, but it’s still notable. The rotations that have become a defining characteristic of this market continued to spin this week. The rotational activity has come alongside significant dispersion across equities as well as low correlation between stocks

While the S&P fell 1.5% this week, the equal-weight kept its loss at 0.4%. YTD laggards like Healthcare and Financials, along with Staples, were among the best performing sectors this week. Energy led the way on oil's move. Speaking of financials, the sector resumed its position as the leadoff hitter for earnings this week. The banks reported strong results, with commentary more or less universally categorizing the US economy as healthy and the consumer as resilient.

Inflation data this week was the main event and the prints came in cool, keeping yields from over-reacting to oil's sharp increase as Iran hostilities ramped up. Next week earnings will accelerate and broaden out from this week's initial wave of Financials. Major reports will include Alphabet, IBM, ServiceNow, SAP and Tesla among many others. The swoon in tech will place added importance on results, if that's physically possible. The US macro calendar is relatively light with flash PMIs the key release. In Europe, the ECB rate decision will headline the calendar. Enjoy your weekend.