We are seeing improvement from very low levels in our model readings led again by the large caps. Uncertainty still looms over Wall Street as the impact of the banking crisis continues to play itself out. The bond market has been extremely volatile as 2-year yields have gone from over 5% to 3.8% in the matter of a month as investors fled to safety.

Last week the Fed kept its balancing act between battling inflation and supporting the banking system with liquidity by hiking an expected 25bps. Powell communicated that the central bank is close to the end of its rate-hiking cycle. The Fed's preferred inflation gauge (Core PCE) comes out Friday and will likely give the most amount of information for investors out of the data releases this week.

Although markets began the year with a risk on tone, the last month has seen more defensive positioning among market participants. Among sectors, we are seeing strength in Technology and Communications while interest rate-sensitive Utilities and Real Estate are grading out the weakest. Picking names with relative strength within sectors has remained the dominant and most effective strategy.