Coiled Spring Capital Market update 7/11/24

Rotation day

We just wanted to offer some quick thoughts on today’s stock market action.

As we wrote last night, we expected a “sell the news” reaction to a softer inflation report. We also highlighted that the resurgence in laggards could begin today.

It seems that it is playing out with the Nasdaq getting crushed and the Dow faring the best out of the major indexes.

Recall our weekend report, in which we discussed the Dow breaking out of the bullish pattern.

The Russell is up almost 3% and is the clear winner today. It has pushed through all the resistance areas we cited.

The cooler CPI has the 2-year treasury coming within 2bps of hitting our 4.47% target that we highlighted in last night’s report.

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