Some of the hardest-hit growth names bounced back after being pounded on Wednesday, but it was a mute rotation, as fears about inflation continued to take hold.
Breadth was five to three negative, and about 250 names hit new 12-month highs.
The Dow Jones finished in the red, but the Nasdaq and Russell 2000 performed well. What was most notable about the action was the long list of stocks that were up more than 10%. There were about 17 names up 20% during the day, which is a good illustration of how much speculative interest there continues to be.
Strength in the Rivian (RIVN) initial public offering helped to keep trading sentiment positive and created some good action in secondary and SPAC names. EVs continue to be one of the hottest themes in the market and are driving other stocks such as Quantumscape Corp (QS) , Nio (NIO) , and Lucid (LCID) .
Another notable pocket of strength was in cannabis. The Republicans are announcing a new bill dealing with legalization on Monday, and there is aggressive positioning in front of the news.
While the indexes are a bit messy as money flows in and out of growth names due to inflation worries, the good news is that stock picking remains robust. That there is some increased volatility and rotation just shows that this is a market where the action is not highly correlated and that individual stock picking is the way to produce alpha.
Have a good evening. I'll see you tomorrow.
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