All the major equity indices climbed off the canvas yesterday after looking out for the count early in the session. They finished lower on the day, but it was undoubtedly a moral victory. Meanwhile, Palantir Technologies (PLTR) staged a monster reversal that continued after the closing bell. These kinds of moves add to its #legendary story and general appeal. As for factors, low volatility continues to be a safe haven.

On a sector basis, Real Estate (XLRE), Health Care (XLRE), and Energy (XLE) are changing hands at a discount to the historical price-to-earnings (P/E) ratio. Individually, there are lots of green boxes (undervalued) names, including a cluster of banks.

I still don’t see a wholesale durable shift away from mega-cap stocks yet. But there are arguments for greater exposure to cyclical non-tech names.

Today’s Session

Initial jobless claims, out this morning, were higher than the consensus.

Continuing jobless claims climbed to 1.972 million from 1.942 million in the prior week.  Historically, these are low numbers, but the building is worrisome as it suggests finding a new job is much harder.  

Philly Fed

Philadelphia Fed Manufacturing Survey came in below consensus. Prices paid climbed noticeably as well.

There is a report out of MIT titled: "The GenAI Divide: State of AI in Business 2025," that suggests, only 5% of companies have had success implementing AI for economic advantage. 

The details of the report are far less problematic than the headlines, but for today it's not helping AI stocks.