In today’s mid-day wrap, we saw a shift in market sentiment as yields spiked higher following a hotter-than-expected Non-Farm Payrolls (NFP) release this morning. The NFP came in at 172k vs 88k expected, signaling strong growth and a headline surprise with an upward revision. This print has set a higher floor for yields, with the 10-year yield now trading above 4.5%. The probability of a September hike has also increased to over 30% according to the BBG WIRP.

In terms of market movers, outperformers include MegaCap Tech vs Non-Profitable Tech (GSPUMENP Index) +5.6% and Software vs Semis (GSPUSOSE Index) +5.2% on the day. On the other hand, Bitcoin Sensitive (GSCBBTC1 Index) fell by 11.4%, Retail Favorites (GSCBHRSB Index) dropped by 7.6%, and Most Short (GSCBMSAL Index) weakened by 6.5%. Momentum (GSPRHIMO Index) was also weaker, down by 5.6%.

The ongoing AI volatility continues to be a theme in the market, with AVGO headlines still being digested after lackluster earnings on Wednesday. The stock is trading down -5.3% today, along with other names in the space such as SNDK (-10.8%), MRVL (-10.8%), MU (-9.5%), and ARM (-11.6%). These moves are accompanied by demanding technicals, with the SOX index closing yesterday at 75% above its 200-day moving average, the most extended since the ’99-’00 era.

In terms of technical analysis, ETFs as a percentage of the tape are elevated at 32% of the tape, up 5% from the 5-day moving average. Top of book liquidity is poor relative to average at $8mm, while volumes are ticking higher, up 5% from the 5-day moving average and +12% from the 20-day moving average.

Our flows indicate that we are currently a 6 out of 10 in terms of overall activity levels, with franchise flows skewed 3.8% better for sale.