Santoli's Wednesday market wrap-up: A rotation rather than a broad stampede higher

CNBC

2 days ago

(These are the market notes on today's action by Mike Santoli, CNBC's Senior Markets Commentator. See today's video update from Mike above.) Modest upside follow-through to Tuesday's emphatically broad rally, this time in the form of rotation rather than a broad stampede higher. The laggard groups that are also plays on near-term Fed rate cuts were the standouts today, while the stretched momentum leaders in mega-cap tech settled down: Russell 2000 over Nasdaq-100 , consumer discretionary over tech . Probably shouldn't be viewed as some consequential tidal shift in market character, more a way for a months-long rally to support itself by changing up the muscle groups being flexed. Russell 2000 with an aggressive move, but this one is probably guilty until proven innocent given the years-long range and its habit for racing higher near the tail end of a short-term market advance. Another morning fade in the S & P 500 after a higher opening, something of a recent pattern. But the action looks pretty mechanical so far, a pretty precise filling of the gap left by Tuesday's post-CPI pop: As noted, the market took the higher but far cooler-than-feared CPI as switching on a sequence of green lights ahead: Few known potentially adverse data catalysts and not as many earnings reports to present possible air pockets in individual stocks. Still, July PPI wholesale inflation tomorrow might present a newly blissed-out Street something to ponder, with its feed-through to the Fed's PCE inflation beacon. Pretty strong bid in Treasuries today, compressing yields by 4-5bp across the curve. It's in synch with a global move lower in yields, but suggests a level of comfort with the pileup of dovish Fed Chair candidates and resumed slide in crude oil prices. Some pretty conspicuous softness in key retail-trader risk-appetite "tells," with HOOD and PLTR down, along with recent hot IPOs CRCL and FIG . Nothing decisive but perhaps a sign of fatigue in the fast-money plays. Massive pop in crypto exchange IPO Bullish ( BLSH ) following the script of recent hot deals, though these splashy debuts have shown a pattern of exhausting near-term investor demand soon after their debut date. CRCL is 49% off its high, FIG -43%, ETOR -41%.