Nearly all asset classes saw small moves to start the week as traders waited for key economic data and Fed Speak. After hotter-than-expected inflation readings from the CPI report earlier in the month, many will be watching the PCE index numbers on Thursday for more insight into the reflation threat.

The S&P 500 is hovering near 5,100 as investor positioning remains "extremely" concentrated in the Magnificent Seven names according to Goldman Sachs strategists. Market breadth being weak creates the possibility and risk of a pullback. However, there is also the hope for the bulls that more positive sentiment and positioning could start to see broader participation, helping fuel another leg to this rally.

Given the shift in investor sentiment over having less conviction on rate cuts over 2024, all eyes will be on the PCE Index on Thursday. This is the Fed's preferred inflation gauge where estimates are for a 2.4% YoY change down from the previous 2.6% read. A hotter number will add more fuel to the narrative that the Fed's estimated cuts in 2024 are overdone.

Newton scores are strong out of Large Caps and Foreign Developed equities. Drilling down, we are seeing more rotation into Value compared to their Growth counterparts. As rates have climbed from the beginning of the year, fixed income remains weak. Beneath the surface, Health Care and Materials are on top. Consumer Defensives, which were at the bottom last week, have the largest rate of change increase. Interest rate-sensitive sectors like Utilities and Real Estate are currently lagging the most.