Payroll Relief Keeps Rotation in Motion

What Happened

• Payrolls cooled just enough to calm recession talk without killing growth; the soft landing narrative survived another week.
• The dollar logged a slip while long-end yields eased, letting cyclicals breathe; tech lagged as funds kept trimming mega-cap exposure.
• Energy stayed firm on refinery outages and geopolitics, with defense riding the same bid as traders rotated out of crowded AI trades.

What It Means

• A cooler labor print lowers stress but doesn’t eliminate it—rotation is still being driven by positioning, not macro exuberance.
• Dollar softness removes a headwind for commodities and EM, reinforcing the energy/real-assets bid that started in early December.
• Equity leadership is fragmenting; if rates stay anchored, capital keeps sliding toward balance-sheet strength and cash flow.

What I Think

• The dollar slip is the tell: the market wants to fund energy and defense, not chase another tech melt-up.
• Any upside surprise in CPI would snap this calm, but absent that, rotation keeps grinding.
• I’m holding the view that December trades like a slow-motion factor rebalance, not a momentum chase.

⸻

Market Terms

• Soft Landing — Growth cooling without recession, allowing rates to ease slowly.
• Positioning Rotation — Capital shifting between crowded trades as risk tolerance changes.
• Long-End Relief — Easing yields at the back of the curve that support value and cyclicals.