00:00 Speaker A
Tomorrow the market action. Let’s bring in now Gemmer Road Capital partners co-founder and CIO Jordan Rizzotto. Jordan, it is great to see you here. Let me start with some of those stats that that Jared just gave us there for the SPX, the S&P 500. Fifth best May ever since 1928, best since 1990. What explains that, Jordan? What do you make of that?
00:29 Jordan Rizzotto
Well, it’s been a tremendous rebound clearly since since the lows that we saw in April. Uh through our framework, we still see, you know, an environment that is characterized by higher volatility. Um we would expect that to continue in the near term. Um and while the rebound has been so strong, there’s clearly been a mixed picture on a sector level basis, right? So, uh you could really make an argument either way. Um and I think that reflects a lot of the uncertainty we’re seeing in the environment.
01:06 Speaker A
Jordan, I’m curious. You just sort of pointed to that bifurcated market that it feels like we’re back to, right? If you look at MAG 7 versus just S&P 500, I think the Roundhill Mags ETF is up 10 or 11% over the last month. S&P is up about five, right? Basically doubling again. You zoom out, it’s really seven or 10 stocks kind of carrying that last leg of the rally. I mean, are we back to the mode where you’d want to be in the large cap tech sector because of that, or is there opportunity outside of the large cap tech sector because they haven’t caught up yet?
02:06 Jordan Rizzotto
Yeah, I think that the the concentration that we’re seeing and the persistence in that concentration, you know, that is indicative of a a more vulnerable condition for a market. Uh the challenge with market concentration typical valuation measures is that they’re great at measuring the condition of the market. They’re not necessarily great from a timing perspective. Uh and so we would think of them exactly as that, a condition, not necessarily a trigger or an actionable point. Um you know, but but to the point that um was was made earlier, you know, we’re seeing a very mixed picture on a sector basis, right? And so, uh you know, on the bearish side, um seeing consumer discretionary consistently be the worst performer or close to the worst performer year to date. Uh and on top of that, the magnitude with which that it’s underperforming consumer staples, those historically are not bullish signs to be to be jumping in heavy, right? Um you know, on the flip side of that, since the lows in April, we’ve seen uh, you know, a great resurgence for industrials, uh for materials, for financials as well. Um and so that is encouraging if if you have more of a bullish tilt.
