Yesterday, US equities extended the winning streak to start the year hitting new all-time highs. The S&P 500 was up 0.6% while the Russell 2000 outperformed with a 1.4% gain. The Dow Jones Industrial Average closed within 1% of the big round 50k level and the Dow Transports also hit new all-time highs, for any Dow Theory followers out there. Memory and storage makers ripped higher as Nvidia commentary from CES and related news flow highlight the exploding demand for the products, while Microchip’s guidance update catalyzed a strong move in analog chip makers both helping the ICE Semi index add to YTD gains which had already exceeded 5%. The rest of tech saw more modest performance. Materials, Healthcare, Industrials and Discretionary were all up ~1-2%. Energy was the clear laggard, down almost 3% as it tracked the commodity lower giving back some of the initial post-Venezuela gains.

US futures were slightly lower overnight with the gains in Asia slowing down after a fast start to the year. Outside of the continued geopolitical headlines it was reasonably quiet ahead of the first of this week’s labor market data. CES headlines and product launches continue to capture some attention with the unveiling of the new Lego Smart Bricks the most talked about in the Reinking household. The headline economic data was mixed but I don’t think it really changes much of the prevailing narrative. Major indices are mixed with the rotational playbook flipped from the last couple of days. Mega-cap tech with tech/growth outperforming while cyclicals have been pulling back.