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Bob Pisani reports on the trading day from the NYSE
Bob Pisani reports on the trading day from the NYSE
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Apr.29
4:48 PM ET
Tuesday, 29 Apr 2008
Smart Money Leaving Commodities for Tech?

Is this the beginning of a rotation in the stock market? There's debate about this, but there are signs that some smart money is positioning themselves for a rotation out of commodities -- and into tech.

  Trade with CNBC's Experts:

This has been spurred by concern that the Fed will begin sounding more hawkish on inflation tomorrow. This (along with some signs that inflation is moderating in Europe) is giving a modest boost to the dollar in the last week.

The result: Money has been quietly coming out of commodity stocks like gold and metals -- but even out of agricultural stocks, despite stellar earnings.

At the same time, classic tech momentum stocks like Google [GOOG  Loading...      ()   ], Baidu.com [BIDU  Loading...      ()   ], Research in Motion [RIMM  Loading...      ()   ], and Apple [AAPL  Loading...      ()   ] have broken out to multi-month highs.

Are the fundamentals for commodities falling apart? No. Demand for gold remains strong. Ol is at 116.. potash is contracting at $1000 a metric ton. Steel prices remain firm. Iron ore prices are rising. But the commodity/commodity stock trade is very long in the tooth (materials stocks are up over 100 percent in the past five years), and it is, as traders say, a very crowded long.


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