Over the last few sessions there has been a rotation underway in the stock market. The leaders are lagging and the laggards are leading.

In order to examine this more closely, I had Nick run some data for me to compare the winners of the stay at home trade versus the losers of the pandemic economy.

In the group of winners I chose Teladoc, DocuSign, Zoom, Amazon, Peloton, and Shopify. The average stock in this basket is up 262% year-to-date (median 177%).

On the other side I chose  Marriott, MGM, Royal Caribbean, Delta, Macy’s and Simon Property. The average stock in this basket is down 48% year-to-date.

The chart below shows the rotation underway. I gotta be honest, I was expecting this to look a little better before Nick shared it with me ¯\_(ツ)_/¯

This is not the laggards first attempt to take the baton back from the leaders. None of the previous rallies stuck. Is this the one that finally does? I’ll tell you in two months.

Why is this happening? Why now? Some might say it’s good old fashioned mean reversion. The rubber band got stretched too far. Others will say the market is anticipating more stimulus. Pick your favorite narrative. More times than not, price drives the news and not the other way around. If this rotation continues, expect the stories to follow. If not, this post will self destruct.