Today's Market and Portfolio Rotations
The calm indexes are a mirage: 25 mega-caps held up the surface while the average S&P 500 stock quietly fell 18-20% in a hidden correction. We walk through the five macro shocks that drove 2026's volatility, the AI momentum trade's rise and mid-year cap ex reckoning, why the generals falling last signals the correction is nearing its end, and the portfolio rotations that follow: a heavy 63% short-duration, high-quality fixed income ballast (roughly flat on the year vs the aggregate bond index down 1.7%), a diversified core index hull, and thematic sails in defense (lifting off into a…
The skinny
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