It’s been hard to get a read on the consumer amidst the trifecta of Fed Easing, Geopolitical turmoil and renewed tariff threats. We’re pulling a cop out and going market weight during this period of macro fluctuations.
Some evidence that the sector is bottoming out has us preferring it as our defensive hedge sector for February.
With health insurance in danger of becoming the latest political football and upwards pressure on rates, we’re staying on the sidelines for February.
A week January for the sector was a disappointment. We like the sector as an oversold inflation hedge entering February despite some lackluster technicals.
Semiconductors remain strong, software continues to be de-rated. Weakness in AAPL and MSFT a growing concern. We start February close to neutral on Tech shares.
In a K-shaped economy, this is a K-shaped sector. Alphabet and META improve, most other names are getting worse, but >70% of the sector’s market cap. are in the former two stocks.
Utilities was our lowest rated sector in the Elev8 model this month. Rising rates and commodities prices have historically been material headwinds to performance.
We’re going underweight the low vol. complex in the Elev8 model this month with interest rates and commodities prices rising.
Some whip-saw in the model as a big shift from Growth to Value has market the beginning of 2026. We’re aligning with the pro-cyclical bull trend in commodities this month.
January 30, 2026 S&P futures −0.8% after U.S. equities finished mixed Thursday, ending off worst levels. The software selloff following earnings from MSFT, NOW, and
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