Latent EquityNov 4 rotation: Consumer Discretionary vs AI Power, and $SOXX
The S&P 500 rose 1.6% on Wednesday. Underneath, it was one of the sharpest rotations in our baskets since Jan 2024.
- Consumer Discretionary (11 stocks plus $XLY): +6.1%, all 12 up ($BKNG +9.8%, $LOW +7.5%)
- AI Power (11 stocks): -9.4%, all 11 down ($VST -13.8%, $NRG -13.5%, $VRT -12.9%, $PWR -11.7%)
- Healthcare +4.1%, Energy Majors -4.7%
The gap between those first two baskets was the 2nd biggest daily spread since Jan 2024. Caveat: baskets use today's member lists applied backwards, not who was in them at the time, and the AI Power names were picked after they rallied.
Why, per news reports: the midterm results, an 8% drop in oil, Texas data-center policy, and KeyBanc's downgrade of $VST.
Chips got hit too: $SOXX fell 3.1% while $SPY rose 1.6%. On the 23 past days chips lagged by 4.5+ points, $SOXX was higher a month later in 17 of 22 cases (avg +6.8%, vs +1.5% for a typical month). But after days it fell 3%+ while the S&P rose, it was higher a week later in only 3 of 10. Small samples. Past patterns don't predict.
What would make it stick: follow-through over the next 5 to 10 sessions. What would say it fades: AI Power wins back half of Wednesday's loss within 5 sessions.
Next check: AI Power vs half of Nov 4 loss within 5 sessions (through Nov 11)
Method and sources
Figures marked "our calc" are our own arithmetic on the cited primary sources (company filings, earnings releases, public datasets). Every figure was checked against its source before publication.
General research, the same for every reader. Not investment advice.