This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Modest upside attempt in the indexes as some deferred portfolio rejiggering and a sharp sell-off in Treasurys filter through the year's first day of trading. The S & P 500 popped briefly back up to the record closing highs of last week just under 4,800 before pressure hit some of last year's big winners in a new tax year and the discarded riskier stocks grab a bid. The index has backed off a bit from the upper border of its nine-month path but nothing too notable just yet in this initial failure to motor above 4,800. Lots of "last shall be first" and vice versa happening today. The top S & P 500 performers today are Tesla and four stocks that were down in a +27% year in 2021: Discovery , ViacomCBS , Norwegian and Carnival cruise lines, plus Occidental Petroleum . Been noting for weeks that January is often the time to "shop in the salvage yard" for busted beta trades after year-end portfolio purges. The S & P 500 high-beta ETF is outperforming the low-volatility basket by almost 3 percentage points. The day's losers are almost all big 2021 winners: Moderna and Fortinet both more than doubled last year, lab testing companies slipping back, etc. Yields flying , with a bit of Treasury curve re-steepening, in part as year-end rebalancing flows shifting into fixed income from equities have abated. Also, perhaps a sense that omicron is ripping through much of the country so quickly that there might not even be enough time for much harm to come to the economic growth trajectory. The broad Street consensus view coming into the year is roughly this: Can't expect another 16%+ return as the S & P has delivered each of the past three years, but most see more modest upside rather than declines. Growth, inflation, earnings set to moderate. Fed set to tighten but might try to wait to start. "Quality" stocks should gain favor over riskier/leveraged ones. It's all plausible, but will be wrong in certain key respects, no doubt. The twin September and November shakeouts put investors more in the defensive, positioning trimmed back significantly, at least entering the past two weeks of 2021 (per this Goldman Sachs gauge): Some concern that flows into the Nasdaq 100 ETF — the Invesco QQQ — have reached a short-term extreme, even as many question how much more work the huge-cap Nasdaq stocks can be expected to do in driving further returns. Tesla deliveries certainly quite good, decisively ahead of published forecasts, though broadly in the zone of what the stock price required at this point. The company has added more than $100 billion in market cap today after delivering about 30,000 more cars than expected last quarter. Market breadth is tilted to the upside about 2:1 up:down volume. Credit is performing well, risk spreads tighter as Treasury yields tick higher. VIX hanging in the 17s, up slightly, showing the post-weekend upside bias. It's reluctant to relax too much more. This probably reflects traders guard raised against headline bombs related to the pandemic but also an inherently wide range of possible macro-outcomes with nominal GDP running above 10% exiting 2021 and a policy-transition year underway.
A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 28, 2021.
Andrew Kelly | Reuters
This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.
- Modest upside attempt in the indexes as some deferred portfolio rejiggering and a sharp sell-off in Treasurys filter through the year's first day of trading.