Yesterday’s market action saw a shift in momentum as retail investors continued to drive the bus, despite a pullback in high beta momentum names. The GSPRHIMO factor led the way higher, adding over 300bps, while the GSTMTDAT and GSPUARTI factors also contributed to the upside. However, the RTY, NDX, and SPX indices all saw gains, with the former two seeing their best day in over a week.

Interestingly, despite the broad-based gains, high beta names saw a pullback, with the GSXUHMOM factor lagging behind. This could be a sign of profit-taking after recent strong performance, or it could be a result of investors rotating out of these names and into other areas of the market.

Retail investors continued to play a significant role in the market, accounting for over 16% of total S&P 500 member volume yesterday, which is a 5+ year high. This suggests that individual investors are feeling more confident in the market and are willing to take on riskier assets.

Looking at our flows data, we can see that overall desk activity levels are quieter today, with factor moves driving the bus. However, high-frequency traders (HFTs) are 7% better to buy in energy, materials, and healthcare, while long only (LO) sentiment is evenly mixed between consumer and healthcare names.

In terms of individual stocks, only four names in the top 10 by volume were above $1: BYND, SCNX, F, and RGTI. This suggests that investors are still cautious and are focusing on value rather than momentum.

Overall, while the market is seeing some upside today, it’s important to keep in mind that retail investor sentiment can be volatile and unpredictable. As such, it’s crucial to stay vigilant and monitor flows data to get a better sense of where the market may be headed next.