At ten o'clock yesterday, SpaceX (SPCX) was on its way to becoming the most valuable company in the world by 2 PM. It finished the session as the fifth biggest name in the market.

Rotation

While all eyes were on SpaceX, major action was underway in the broader market. Money poured out of Technology (XLK) and surged into Financials (XLF), which was led by strong action in bank stocks. Utilities (XLU) and Industrials (XLI) got nibbles as well.

Financials look great on the chart, moving away from key moving averages, and heading for a retest of the recent high.

The question for the market has long been, can there be a handoff from Technology names to traditional cyclical names? It has been years (2009) since they traded at parity. It will happen one day, but it's hard to see it happening today. Moreover, where would a name like Caterpillar (CAT) fit into this dynamic?  At some point, every company will be technology - or tech adjacent.

Factors

Momentum was down, but not as hard as I imagined. The real story is that only the safe haven of low volatility was higher on the session. Still, no bidders for value and quality, which is where the experts keep saying the best opportunities are.

Strong but Fragile

A report that Microsoft (MSFT) scrapped a $3.0 billion cloud deal with Oracle (ORCL) over security and compliance concerns triggered a sell-off in the Semiconductor Index (SOX) Sector. It appears to be a story of a lack of trust, which is becoming more important at this stage of the artificial intelligence (AI) enterprise buildout. Selling in chips also occurred, as the NASDAQ-100 (NDX) was trading at the top of its  long-term trendline.

Kevin Warsh in the Batter’s Box

I’m so pumped about today’s Federal Open Market Committee (FOMC) conclusion, and Kevin Warsh's first time at the podium as Chairman. The freefall in crude oil prices will also help Washington establish a case for rate cuts, perhaps at the next meeting.

Today’s Session

Retail sales came in significantly above consensus, which might have been bad news under the old Fed regime, but I suspect Kevin Warsh wants good things to happen to the economy.

Bond yields are slightly higher but not soaring.

Yesterday’s tech selling, especially in semiconductors, has attracted buyers.

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