Chips rally while software, power producers and utilities sell off as bonds ignore Warsh
For equity holders, the day split the growth trade: companies with visible hardware earnings held their premium, while long-duration software and the AI-power utilities gave some back.
Chips led a narrow tape: Technology rose 1.28% and only 5 of 12 sectors finished higher. TSEM, ON and STM led, while Utilities fell 1.16%, Financials 0.91% and high-multiple software (DT, APP, MANH) dropped sharply.
Since the last briefing
Yesterday we held that inflation is still in charge and favoured quality defensives over high-multiple growth, because rising yields were a headwind for growth. Today the defensive part broke.
What drove the session and how it transmitted, the exposure table by persistence grade, where the committee disagreed, its verdict and weighting, and the falsifiers that would prove it wrong.