The market is experiencing a shift in activity, with the rotation continuing as momentum stabilizes. Yesterday’s performance was the second worst of the year for the GSPRHIMO basket, but early activity today was driven by ETF price action and notable covering bid from hedge funds. The lack of liquidity is exacerbating the move higher, with volumes running high and the top of the book running low.

In terms of sector rotation, HCare continues to be a beneficiary, with demand skewing 3:1 better to buy. This shift in activity is driven by a healthy mix of LO and HF demand. Overall activity levels are up 18% compared to the trailing two weeks, with market volumes up 21% compared to the 10-day moving average. Our floor tilts slightly better to buy, with hedge funds and longs both performing well.

The overall picture remains complex, with short sales driving long buys, and the US equity markets net sold for a second straight session. However, the HCare sector is seeing notable demand from both LOs and HFs, with activity concentrated in large-cap pharma and broader therapeutics.

While the market remains complex, the rotation continues as momentum stabilizes. The HCare sector is a key area of focus, with demand from both LOs and HFs driving activity. Overall, activity levels are up and market volumes are running high, indicating a continued desire to invest in the US equity markets.