The Great Rotation – Time to be Macro Mindful
Year-to-date, we are witnessing a true “Tale of Two Markets.” While the market-cap weighted S&P 500 is in the red, the Equal Weighted (EW) S&P 500 is up over 5%.
With 63% of constituents in the green, the “soft landing” narrative is broadening out— fueled by a rotation away from mega-cap tech concentration and AI-related capex fatigue & disruption threats. But under the hood, the quantitative picture is shifting.
What is the Macro telling us?
The Macro Engine: From the Apr’25 lows through Jan’26, macro factors accounted for roughly two-thirds of the EW S&P 500’s returns. The index moved in lock-step with its fundamental drivers.
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