The recent speculative growth unwind has hit a temporary pause, as the S&P 500 sees a mere 10 basis point increase. This development comes as earnings continue to ramp up, with several companies reporting strong results so far. Meanwhile, the delayed US CPI print is set to release on Friday, providing further insight into the economy’s performance.

In particular, the quantum computing space is seeing significant growth, with the WSJ reporting that the US government is looking to acquire equity stakes in this area. This development is driving Speculative Growth higher by 1.9%, although the move is not particularly large compared to its historical performance (3.7% standard deviation). The desk has observed several sellers over the past few sessions.

AI also sees a rebound, with the sector up 50 basis points. While earnings have been mixed so far, with Tesla experiencing a significant profit drop despite record car sales and Super Micro Computer reporting a top-line miss, the AI Industrials sector is driving basket strength after Wednesday’s momentum unwind dragged these stocks lower.

As the speculative growth unwind continues, it may be time to rotate back into higher-quality names. A disconnect has emerged between revisions (still very strong) and recent stock performance (lackluster) for the Mag7 group. In fact, almost a quarter of the index has now reported, with 84% beating earnings according to Bloomberg. Q3 EPS growth is on pace for 10%, ahead of the 8.4% consensus. Next week sees 44% of the S&P weight reporting, including five of the Mag7, providing further clarity on the group’s performance.