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The great rotation into value stocks continues, lifting global markets

November 11, 2020, 10:04 AM UTC

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Good morning, Bull Sheeters. And happy Armistice Day to all you veterans. The risk-on rotation is in full swing as vaccine optimism continues to buoy global markets.

Bank stocks and futures are flat today, but energy continues to rumble forward, helped by rising crude prices. The two-day sell-off in tech stocks, meanwhile, is on pause—with Chinese tech stocks the big exception.

Let’s check in on the action.

Markets update


  • The major Asia indexes are mixed in afternoon trading with Japan’s Nikkei up 1.8%.
  • It’s Singles’ Day, Alibaba’s mega online shopping event. This year it’s expected to shatter records, already pulling in more than $56 billion in sales.
  • Online retail therapy can’t help Chinese tech stocks. Last week’s abruptly halted Ant Group IPO is spooking investors, sending tech shares falling again today, wiping out $260 billion in value in the past two days. Alibaba’s Hong Kong shares are down nearly 10%.


  • The European bourses were a smidge higher out of the gates with the Stoxx Europe 600 up 0.25% at the open, before edging higher.
  • Europe’s beaten down bank stocks are once again in demand, but their troubles are far from over. An EU banks watchdog warns in the Financial Times that the sector faces a wave of nonperforming loans next year.
  • Investors aren’t just snatching up value stocks. The demand for Greek sovereign debt has been so brisk it pushed the yield on three-year notes into negative territory this week, a startling first.


  • U.S. futures are much more stable this morning, pointing to a positive open.
  • That’s after the small cap Russell 2000 (+1.7%) and blue chip Dow (+0.9%) closed higher on Tuesday, while tech stocks dragged down the S&P 500 and Nasdaq.
  • Apple shares are trading a tick higher in pre-market trading after the company unveiled a new lineup of computers yesterday. (Am I the only one who feels their last great laptop was the zippy MacBook Air, circa 2014?) Fortune‘s Aaron Pressman explains why these new models are so significant.


  • Gold is down, stuck around $1,875/ounce.
  • The dollar is flat.
  • Crude is cruising again today. Brent futures are trading above $45/barrel, a 10-week high.
  • Bitcoin bounced back. It’s up above $15,400.



We need an effective COVID vaccine. Stat!

The U.S. registered nearly 140,000 new COVID cases on Nov. 10, a new record. The data looks bad.

Vaccine shorts

Here’s the run-down of J.P. Morgan’s COVID-19 Vaccine Tactical Short Candidates.

FAAMG dominance, YTD

“while the S&P 500 is up this year, the gains have been extremely narrow: the five mega-cap “FAAMG” firms (Facebook, Apple, Amazon, Microsoft and Google, which account for about one-fifth of the index market capitalization) are up roughly 40%, while the rest of the market is still down on the year.” — Goldman Sachs on how a vaccine-led recovery for cyclical stocks is long overdue.


Have a nice day, everyone. I’ll see you here tomorrow. 

Bernhard Warner

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Today's reads

A prime antitrust case. Shares in Amazon fell 3.5% on Tuesday (and they're down in pre-market trading today) after EU competition chief Margrethe Vestager laid out antitrust charges against the e-commerce behemoth. Fortune's David Meyer details the case Europe is bringing against Amazon, and how the retailer faces similar pressures in other big markets.

The soul of suburbia. Landlords are having a nutty 2020. Covid-stricken tenants are finding it hard to make rent, and yet there's surging demand in suburban communities as the market shifts from cities to a home on the outskirts with a bit of space. And that's lifting rental prices to new records. “It’s ridiculously high when you put it in a backdrop of a recession," a real estate research chief tells the Wall Street Journal.

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Market candy

Quiz time

Which sector of the S&P 500 was the best performer yesterday? Was it...?

  • A) Financials
  • B) Energy
  • C) Consumer Discretionary
  • D) Info Technology

The answer is B, energy, which climbed 2.5% yesterday and is up an astonishing 14.7% this week. The energy sector is still down 44% YTD, but its comeback is one of the more fascinating storylines of this rotation rally. So much for the campaign trail warnings of a Biden presidency crushing the sector.