Bespoke co-founder Paul Hickey appeared on CNBC’s Squawk Box earlier today to discuss Monday’s sell-off and market prospects going forward.  To view the segment, please click on the image below.

Remember back when Greece was the laughingstock of Europe with its seemingly non-stop economic, political, and debt problems?  They aren’t laughing as much anymore.  Just yesterday, S&P raised its rating on Greek long-term debt, and while the current rating of B+ is still pretty far down the ladder in terms of quality, it’s moving in the right direction.  As things currently stand, Greek 10-year debt sports a yield of 4.11%, which is down more than a full percentage point in the last year.

At the same time that yields on Greek debt have been falling, yields on Italian debt have been rising.  In Italy, yields on 10-year debt are at 2.89%.  While that’s right around the same yield as the US 10-year, relative to most other of its EU peers, Italian debt yields are up sharply over the last year as well as the last three months.  As a result of the opposite moves in the yields of Greek and Italian 10-year debt, the spread between the two has narrowed considerably.  Through Tuesday, yields on 10-year Greek debt offer a premium of just 122 basis points over Italian debt, which is the narrowest spread since December 2009. We’ll let you decide what this says about the relative attractiveness of either country’s debt.

While yesterday’s decline has been largely blamed on the ongoing trade dispute between the US and China, we wouldn’t discount the impact of end of quarter rebalancing either.  The chart and table below help to illustrate the point.  The chart compares the performance of the 24 S&P 500 Industry Groups on Monday (x-axis) to their QTD performance through last Friday (y-axis).  While there are some exceptions, the industry groups that were performing the best QTD through last Friday were down the most on Monday, while the QTD laggards performed best on Monday.

You can further see the “changing places” performance in the lower table.  As shown, some of the best-performing industry groups QTD through Monday (Retailing, Software, and Energy) were down well over 2% yesterday.  Conversely, many industry groups that were lagging QTD heading into Monday (Food, Beverage & Tobacco and Household & Personal Products) actually saw marginal gains on the day. Trade is definitely a factor at play in the market these days, but it’s hardly the only one.

With the US stock market getting crushed to start the trading week, below is a quick snapshot highlighting the performance of various ETFs across asset classes.  For each ETF, we show its performance today, quarter-to-date, and year-to-date.

Today’s market action is pretty simple to explain.  We’re seeing extreme selling in the areas of the market that had been performing the best over the last couple of months.

As shown in our matrix below, the Nasdaq 100 (QQQ), small caps (IVW, IWM), Consumer Discretionary (XLY), Energy (XLE), and Technology (XLK) are the areas of the US market that are getting hit the hardest today.  These are the areas that have rallied the most both YTD and in Q2.  Defensive areas of the market like Utilities (XLU) and Consumer Staples (XLP) are actually catching a bid today as investors have decided to rotate out of recent winners and into more non-cyclical areas of the market.

Outside of the US, both Brazil (EWZ) and Mexico (EWW) are actually up on the day, while China (ASHR), the UK (EWU), and Australia (EWA) are down more than 2%.