“Sell in May…” is a British slogan that has its roots in the old-time composition of equity markets in the US and Europe–meaning no tech and lots of heavy industry–and the European labor practice of shutting factories down and having everyone go on vacation in August.

Yes, most European exchanges are still tech-deficient and in a normal year Europe shuts down for the month of August. And, yes, in a normal year Wall Street bigwigs decamp for the Hamptons in the summer, leaving behind assistants with limited power to act on their own and an aversion to disturbing the boss’s wa. So, yes, in a normal year there tends to be lower volume and less price volatility in world stock markets than in other seasons. But this is not the big thing it once was, particularly so in the US. Here, almost half the market is tech and very little is heavy industry or energy (where the summer driving season is a big thing).

Having said all this, there has been a notable change in the direction of the overall stock market since about the beginning of June. I noticed this mostly because I realized that after a startlingly good 2020 and the inevitable giveback earlier in the year, my portfolio has, contrary to my expectations, somehow gone from, say, ten percentage points below the S&P in March (I stopped looking for a while, so I don’t know precisely what the nadir was) to -2.5 percent now.

How did this happen?

Since June 1, the major indices have performed as follows:

Nasdaq +8.1%

S&P 500 +5.4%

Russell 2000 -2.7%

Year to date, the results are:

S&P 500 +18.1%

NASDAQ +15.0%

Russell 2000 +13.0%.

To me, the index results say that since June the market has shifted away from prizing stocks that will benefit from broad-based cyclical recovery, returning instead to secular growth names. What the indices don’t say, but what I think is the case, is that at the same time there has been a sorting out of stocks in the secular category between those whose allure is mostly a function of the pandemic and those whose prospects are on sounder footing as the pandemic abates.

I don’t think the relative strength of NASDAQ is just a summer thing that will disappear on Labor Day.

I read the R2000 weakness as a result of worries about the delta COVID variant and the large number of unvaccinated Americans. I have hopes, but nothing I’d care to bet on, about how that will play out. So I’m no longer as eager to have smaller-cap US exposure as I was after Trump’s defeat (last month I sold the tail-end of the R2000 position I built up after the election last year).