With end of football season and pitchers and catchers reporting for Spring Training, it felt like Winter maybe was coming to an end despite the groundhog’s prognostication. Things started well in the markets too this week, with the S&P trading higher, software continuing its Friday bounce and small caps leading on Monday. It was a false spring, however. The rolling wave of AI displacement fears (excuse the mixed metaphor) didn’t recede out to sea but continued inland, slamming into new industry groups. Financial brokers and wealth advisor stocks, data analytics companies, Real Estate firms, trucking and logistics companies all got whacked. The S&P 500 has been unable to crack 7000 on multiple tries, and on Thursday it broke below its 50-day again and closed at its lows, hovering just above the 100 day. However on Friday a brief move below the 100d was quickly bought and the index pushed back above the line.

Despite the ugly narrative above, the index is only off 1% for the week and 2% below its all-time closing high. That’s with the biggest of the big not only notably absent from the leaderboard, but actively weighing on the overall index. The equal-weight was up modestly. Small and Mid-caps were down but outperformed. Value beat Growth again. Utilities ripped and led the pack as the XLU gained 7%. Tech fell but software stabilized.

Yields have been moving lower throughout the week outside of the uptick following the jobs report. The USD index pulled lower this week with most of the move happening on Monday after the election results in Japan. Crypto drifted lower throughout most of the week after last Friday’s snapback and ended the week on a positive note. Precious metals ended the week on either side of unchanged

Looking ahead, Saturday is Valentine’s Day. Get your flowers now. Lets talk warmer weather too. Pitchers and catchers have already begun reporting to Spring Training and the first games will take place Friday. Back to the markets, which will be closed on Monday for Washington’s Birthday. The big data is next Friday: preliminary Q4 GDP, December PCE and Flash PMIs. Friday is also the next potential date for the Supreme Court to issue a ruling on the tariff case. Overseas, China will be closed for the Lunar New Year, which could be interesting for commodity markets. Earnings will continue to roll in. Have a great weekend. Play Ball!