All Research Archives
Daily Note
5.26.2023
Equities: Mixed session for major averages yesterday as investors weighed ongoing debt ceiling negotiations, revised U.S. gross domestic product (GDP) data for the first quarter, and strong earnings results from Nvidia. The NASDAQ 100 (QQQ) surged 2.43%, the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) slipped 8 bps. Small-caps were weak with the Russell 2000 (IWM) sinking 78 bps. According to a report by Reuters, debt ceiling negotiations between congressional leaders and President Joe Biden advanced Thursday but the deadline is quickly approaching. US economic growth in Q1 2023 was faster than previously estimated, the Commerce Department reported on Thursday. GDP increased at an annualized rate of 1.3% in the first quarter, up from an initial estimate of 1.1% reported last month. GDP is adjusted for inflation and seasonality. On Friday, investors will be looking towards April's Person Consumption Expenditures (PCE) data. Nvidia soared more than 24% on Thursday and lifted other tech names. The company posted stronger-than-expected revenue guidance following exploding demand for Nvidia chips used in artificial intelligence. Several analysts covering Nvidia hiked their price targets on the stock following the results and the chipmaker is now approaching a $1 trillion market capitalization.
Growth-oriented pockets of the markets outperformed on Thursday with S&P 500 Growth (SPYG) and S&P 500 High Beta (SPHB) both climbing around 1.50%. Most U.S. factor strategies were in negative territory as S&P 500 Dividend (SPYD) declined 96 bps and S&P 500 Momentum (SPMO) dropped 92 bps. Emerging Markets (EEM) dipped 21 bps as South Africa (EZA) fell 3.22% and China (MCHI) decreased another 2.01%. Taiwan (EWT) was also up 2.24%. Developed ex-U.S. MArkets (EFA, -14 bps) were pulled lower by Hong Kong (EWH, -1.59%).
Sectors: Technology (XLK) jumped 3.84% yesterday, handily outpacing other U.S. sectors. XLK hit net 52-week highs and was lifted by Semiconductors (XSD, +4.53%). Industrials (XLI, +33 bps) and Real Estate (XLRE, +23 bps) were the only other sectors to post gains on the day. Energy (XLE) was the worst performer on Thursday, falling 1.78% as Oil & Gas Equipment & Services (XES) and Oil & Gas Exploration & Production (XOP) both declined more than 2.50%. Utilities (XLU, -1.34%) and Health Care (XLV, -1.02%) were also weak while Consumer Staples (XLP) retreated 76 bps. XLU and XLP currently sit in oversold territory and XLU is trading within 5% of 52-week lows.
Themes: Cannabis (MJ) plunged 3.98% to 52-week lows on Thursday and undperformed other global thematic segments. Biotech (SBIO) and Multi-Theme (ARKK) both sunk 2.74% while Genomics (ARKG) dropped 2.49%. Online Retail (IBUY), Clean Energy (PBW), and Disruptive Tech (ARKW) were all down more than 1% on the day. Meanwhile, eSports & Video Games (ESPO, +2.46%), Big Data (AIQ, +2.22%), and Connectivity (FIVG, +2.07%) saw solid returns. AIQ sits just 4 bps from 52-week highs. Cloud Computing (SKYY), Smart Infrastructure (GRID), and Robotics & AI (ROBO) all gained more than 1.50% and NextGen Transportation (DRIV) rose 1.22%.
Commodities & Yields: Broad Commodities (DJP) were down 1.43% with all broad-based sectors in the red. Energy (DBE) sunk 2.05% with Natural Gas (UNG) falling 4.25% and Precious Metals (DBP) declined 1.07% as Gold (GLD) decreased 96 bps. The U.S. Dollar (UUP) added 46 bps, U.S. Aggregate Bonds (AGG) dipped 37 bps, and 20+ Year Treassury Bonds (TLT) slipped 25 bps. At Thursday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.508% and the U.S. 10-Year Treasury Yield stood at 3.815%.
Global Thematic Playbook
5.24.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.24.2023
Equities: U.S. markets finished lower on Tuesday as investors awaited updates on the ongoing debt ceiling negotiations. The tech-heavy NASDAQ 100 (QQQ) declined 1.27%, the S&P 500 (SPY) dropped 1.12%, and the Dow Jones Industrial Average (DIA) fell 69 bps. Treasury yields remained elevated with the U.S. 2-Year topping 4.40% and the U.S. 10-Year rising above 3.75% intraday yesterday before falling late in the day. Sales of newly constructed homes unexpectedly increased 4.1% in April from March, and up 11.8% from a year ago, according to a joint report from the US Department of Housing and Urban Development and the US Census Bureau. Additionally, Richmond Fed manufacturing data for May came in at -15, the lowest reading since February. Earnings wise, Lowe’s beat analysts’ estimates on earnings and revenue yesterday but cut its full-year forecast. The home improvement giant is the latest retailer to warn of slower sales ahead, joining Walmart, Target, and Home Depot. Zoom finished down more than 8% despite reporting strong results after Monday’s close. Apple also announced a new multibillion-dollar deal with Broadcom to develop 5G radio frequency components in the U.S. on Tuesday. Apple said its deal with Broadcom is part of its 2021 commitment to invest $430 billion in the U.S. economy.
All U.S. factor strategies posted losses yesterday except for S&P 500 Enhanced Value (SPVU, +7 bps). S&P 500 Minimum Variance (SPMV), S&P 500 High Beta (SPHB), S&P 500 Growth (SPYG), S&P 500 Value (SPYV), and S&P 500 Quality (SPHQ) were all down more than 1% on the day. Emerging Markets (EEM, -1.55%) were pulled lower by China (MCHI), which sunk 2.75% following a Bloomberg report of a new COVID wave in the country. The report referenced a senior health adviser in the China that warned that the wave could peak at about 65 million cases a week and will likely hit toward the end of June. Developed ex-U.S. Markets (EFA) dipped 1.47% as France (EWQ) dropped 2.18%, Hong Kong (EWH) fell 1.75%, and Japan (EWJ) slipped 1.44%.
Sectors: Energy (XLE) jumped 1.07% on Tuesday and was the only U.S. sector to finish higher. Materials (XLB) and Technology (XLK) were the wors performing sectors, falling 1.55% and 1.48%, respectively. Communication Services (XLC), Real Estate (XLRE), Industrials (XLI), Financials (XLF), and Health Care (XLV) all dipped more than 1%. XLV was impacted by underperformance from Health Care Equipment (XHE, -2.80%) and Health Care Services (XHS, -1.28%). Consumer Discretionary (XLY) also dropped 91 bps and Consumer Staples (XLP) retreated 74 bps. Industry wise, Aerospace & Defense (ZAR, -1.89%) and Homebuilders (XHB, -1.61%) lagged.
Themes: Most global thematic segments were down more than 1.40% on Tuesday. Casinos & Gaming (BETZ, -2.30%), Multi-Theme (ARKK, -2.17%), and eSports & Video Games (ESPO, -2.07%) saw the worst returns while Disruptive Tech (ARKW), Robotics & AI (ROBO), and Advanced Materials (REMX) all declined at least 1.90%. Digital Infrastructure (SRVR) fell 1.85% and is nearing oversold territory. Genomics (ARKG, +18 bps), Clean Energy (PBW, +11 bps), and Biotech (SBIO, +4 bps) were the only segments in the green yesterday. The KraneShares CSI China Internet ETF (KWEB) and the VanEck Gaming ETF (BJK) were the worst performing thematic ETFs on the day, both sinking more than 3%.
Commodities & Yields: The U.S. Dollar (UUP) increased 28 bps, U.S. Aggregate Bonds (AGG) added 11 bps, and TIPS Bonds (TIP) rose 31 bps yesterday. At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 4.320% and the U.S. 10-Year Treasury Yield stood at 3.696%. Industrial Metals (DBB, -1.87%) were weak once again, dragging Broad Commodities (DJP, -30 bps) lower. Tin (JJT) and Nickel (JJN) were both down more than 2% while WTI Crude Oil (USO) gained 1.50%.
U.S. Factor Playbook
5.23.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.23.2023
Equities: Ahead of Wednesday’s release of the Federal Open Market Committee (FOMC) minutes and Thursday’s first quarter Gross Domestic Product (GDP) results, U.S. markets were mixed on Monday. The tech-heavy NASDAQ 100 (QQQ) gained 34 bps to new 52-week highs, the S&P 500 (SPY) inched higher by 4 bps, and the Dow Jones Industrial Average (DIA) declined 39 bps. Small-Caps outperformed with the Russell 2000 (IWM) climbing 1.22%. Treasury yields continued to push higher with the U.S. 2-Year rising above 4.30% and the U.S. 10-Year jumping higher than 3.70%. President Joe Biden and House Speaker Kevin McCarthy met in the Oval Office on Monday evening to discuss the debt limit face to face, the White House announced. Treasury Secretary Janet Yellen said Sunday that “hard choices” will need to be made about which bills will go unpaid if the debt ceiling is not raised. After the closing bell, Zoom Video reported strong quarterly earnings results that topped expectations and raised its full-year forecasts for revenue. This week, Lowe’s, Dick’s Sporting Goods, Nvidia, Costco, and VMWare are all scheduled to report earnings results.
S&P 500 High Beta (SPHB, +92 bps) and S&P 500 Dividend (SPYD, +50 bps) outpaced other U.S. factor strategies to start off the week. S&P 500 Momentum (SPMO, -55 bps) and S&P 500 Quality (SPHQ, -48 bps) were the worst performing factors. Emerging Markets (EEM) advanced 82 bps with China (MCHI), South Africa (EZA), and Indonesia (EIDO) all rising more than 1%. Developed ex -U.S. Markets (EFA) added just 3 bps as South Korea (EWY) rose 1.71% and Germany (EWG) dropping 38 bps. Japan (EWJ) gained 44 bps and sits at 52-week highs.
Sectors: U.S. sectors were mixed yesterday with Communication Services (XLC) increasing 91 bps to new 52-week highs and Consumer Staples (XLP) dropping 1.51%. XLP is approaching oversold territory. Real Estate (XLRE) was also up 66 bps followed by Technology (XLK, +19 bps), Financials (XLF, +18 bps), and Health Care (XLV, +10 bps). Materials (XLB) declined 52 bps, Energy (XLE) slipped 41 bps, and Consumer discretionary (XLY) fell 31 bps. Utilities (XLU) and Industrials (XLI) were relatively flat on the day. On the industry level, Reigiona Banks (KRE, +3.19%) posted strong returns. Internet (XWEB), Biotech (XBI), Oil & Gas Equipment & Services (XES), and Banks (KBE) all jumped more than 2% as well.
Themes: Excellent performance for global themes on Monday with all global thematic segments posting gains except for Advanced Materials (REMX, -28 bps). Genomics (ARKG) led the charge, surging 5.46%. Multi-Theme (ARKK), and Clean Energy (PBW) were both up more than 4% while Disruptive Tech (ARKW) and Cannabis (MJ) both rose more than 3%. Space (UFO, +2.57%), Biotech (SBIO, +2.55%), Industrial Revolution (ARKQ, +2.55%), and FinTech (FINX, +2.42%) saw solid gains as well. The Global X Robotics & Artificial Intelligence ETF (BOTZ) has the seen highest net inflows amongst thematic ETFs over the past week with $72 million. BOTZ has rocketed mroe than 30% thus far in 2023 and currently sits at 52-week highs.
Commodities & Yields: At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.328% and the U.S. 10-Year Treasury Yield stood at 3.719%. The U.S. Dollar (UUP) added 7 bps, U.S. Aggregate Bonds (AGG) dipped 9 bps, and Senior Loans (BKLN) fell 72 bps. Broad Commodities (DJP) sunk 43 bps, pulled lower by Industrial Metals (DBB, -1.30%). Copper (CPER) was down 1.22%, Tin (JJT) fell 2.03%, and Natural Gas (UNG) plunged 6.17%.
U.S. Sector & Industry Playbook
5.22.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.22.2023
Equities: U.S. markets posted losses on Friday as investors weighed updates around the ongoing U.S. debt ceiling negotiations and comments from Federal Reserve Chairman Jerome Powell around interest rates. The Dow Jones Industrial Average (DIA) declined 34 bps, the NASDAQ 100 (QQQ) dropped 23 bps, and the S&P 500 (SPY) fell 15 bps. Despite Friday’s losses, all three major averages saw positive returns last week with QQQ gaining 3.53%, SPY rising 1.71%, and DIA adding just 51 bps. QQQ remains in overbought territory. All three major averages are still trading above realtive 50-day and 200-day moving averages. GOP negotiators walked out of a debt ceiling meeting on Friday, pulling markets lower. However, Powell stated that interest rates may not have to rise as much as expected to quell inflation due to recent turmoil in the banking sector, which boosted investor sentiment. This week, investors will be looking towards New Home Sales data, the release of the Federal Open Market Committee (FOMC) minutes, Gross Domestic Product (GDP) figures, and Personal Consumption Expenditures (PCE) data.
S&P 500 Momentum (SPMO, +40 bps), S&P 500 Pure Growth (RPG, +18 bps), S&P 500 Low Volatility (SPLV, +11 bps), and S&P 500 Growth (SPYG, +2 bps) were the only U.S. factor strategies in the green on Friday while S&P 500 High Beta (SPHB) decreased 76 bps and S&P 500 Pure Value (RPV) sunk 68 bps. Last week, SPHB jumped 4.46% and RPV rose 2.16%. SPLV was down 1.64% on the week. Developed ex -U.S. Markets (EFA) advanced 59 bps on Friday as South Korea (EWY) rose another 1.39% and Germany (EWG) added 83 bps. Emerging Markets (EEM) were up just 8 bps as China (MCHI) declined 34 bps. EFA and EEM gained 71 bps and 1.12%, repsectively, last week.
Sectors: Energy (XLE) was up 77 bps on Friday and outpaced other U.S. sectors. Health Care (XLV, +47 bps), Materials (XLB, +26 bps), and Consumer Staples (XLP, +7 bps) were the only other sectors to see positive returns on the day. Consumer Discretionary (XLY) underperformed, falling 84 bps. Communication Services (XLC) and Financials (XLF) dipped 53 bps and 43 bps, respectively. Technology (XLK) dipped just 4 bps and remians in overbought territory. Retail (XRT) plunged 3.58% on the day. Last week, XLK was the best performer, surging 4.33%. XLC, XLY, and XLF were all up over 2% on the week while Utilities (XLU) declined 4.23%. Year-to-date, XLC has climbed 28.31% and XLK has jumped 26.83%.
Themes: Most global thematic segments finished lower on Friday with Online Retail (IBUY, -2.30%) falling the furthest. Clean Energy (PBW), Disruptive Tech (ARKW), Blockchain (BLOK), and Multi-Theme (ARKK) all sunk more than 1% while Solar (TAN), Cannabis (MJ), and eSports & Video Games (ESPO) each fell around 90 bps. Biotech (SBIO) was strong on Friday, climbing 1.33%. Genomics (ARKG, +89 bps), Robotics & AI (ROBO, +42 bps), Smart Infrastructure (GRID), Cyber Security (HACK, +34 bps), and Big Data (AIQ, +16 bps) also finished higher. Last week, Big Data (AIQ) and Cloud Computing (SKYY) outperformed, both advancing more than 5%. Most segments were in the green on the week but Solar (TAN) and Digital Infrastructure (SRVR) both declined around 2.50%.
Commodities & Yields: Broad Commodities (DJP) inched higher by 13 bps on Friday as Previous Metals (DBP) added 95 bps and Energy (DBE) dipped 46 bps. Gold (GLD) gained 99 bps and Nickel (JJN) rose 2.93%. U.S. Aggregate Bonds (AGG) slipped 22 bps, 20+ Year Treasury Bonds (TLT) declined 71 bps, and the U.S. Dollar (UUP) was down 28 bps. At Friday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.279% and the U.S. 10-Year Treasury Yield stood at 3.682%.
U.S. Size & Style Playbook
5.21.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.19.2023
Equities: U.S. markets finished higher for the second consecutive session on Thursday with the NASDAQ 100 (QQQ) jumping 1.86%, the S&P 500 (SPY) rising 96 bps, and the Dow Jones Industrial Average (DIA) gaining 43 bps. Treasury yields continued to push higher with the U.S. 2-Year increasing above 4.25% and the U.S. 10-Year topping 3.65% intraday. Investor sentiment was boosted by continued optimism from House Speaker Kevin McCarthy on the debt ceiling negotiations. McCarthy said he can see the path towards an agreement ahead of the first vote on the measure next week. Separately, Dallas Fed President Lorie Logan said Thursday that inflation data so far doesn’t justify skipping a rate hike in June. Fed Governor Philip Jefferson also said inflation is too high, but he’s watching to see the impact that the rate hikes will have on the economy before deciding on future moves. Fed Chair Jerome Powell is slated to speak on Friday. In other economic news, initial jobless claims unexpectedly declined 22K last week to 242K, indicating the labor market still has some tightness. The Philadelphia Federal Reserve’s manufacturing index for the region rose to -10.4, an increase of 29 percentage points and better than the estimate for -20. Earnings wise, Walmart beat estimates on the top and bottom lines and raised forward guidance amid strong grocery sales.
Growth-oriented pockets of the markets were strong yesterday with S&P 500 High Beta (SPHB, +2.20%) and S&P 500 Growth (SPYG, +1.04%) outpacing other U.S. factor strategies. S&P 500 Value (SPYV) also added 86 bps and S&P 500 Low Volatility (SPLV) dropped 21 bps. Emerging Markets (EEM, -51 bps) were dragged lower by South Africa (EZA, -1.90%) and China (MCHI, -1.78%). MCHI was impacted by Alibaba (8.26% weight) which fell more than 5% on Thursday after reporting mixed earnings results with revenue falling short of expectations. Developed ex-U.S. Markets (EFA) dipped 15 bps with the U.K. (EWU) declining 63 bps and South Korea (EWY) rising 77 bps.
Sectors: Seven of the 11 U.S. sectors posted gains yesterday. Technology (XLK) surged 2.05%, entered overbought territory, and hit new 52-week highs. XLK was bolstered by Semiconductors (XSD, +2.87%) and Software & Services (XSW, +2.07%). Communication Services (XLC) and Consumer Discretionary (XLY) climbed 1.80% and 1.55%, respectively, with XLC also hitting 52-week highs. Industrials (XLI), Financials (XLF), and Energy (XLE) all rose more than 70 bps while Materials (XLB) added 59 bps. Real Estate (XLRE, -62 bps) and Consumer Staples (XLP, -48 bps) lagged other sectors. Utilities (XLU) sunk another 30 bps and is nearing oversold territory. On the industry level, Homebuilders (XHB) gained 1.74% and hit 52-week highs.
Themes: Mixed session for global themes on Thursday. Cloud Computing (SKYY, +1.89%) and Big Data (AIQ, +1.87%) saw the strongest returns while Industrial Revolution (ARKQ), Disruptive Tech (ARKW), and Cyber Security (HACK) all advanced more than 1.50%. AIQ hit 52-week highs and is approaching overbought territory. Multi-Theme (ARKK, +1.40%), Robotics & AI (ROBO, +1.39%), Connectivity (FIVG, +1.33%), and 3D Printing (PRNT, +1.22%) all posted solid gains on the day as well. Solar (TAN) and Clean Energy (PBW) underperformed yesterday, declining 1.24% and 98 bps, respectively. Blockchian (BLOK) was down 94 bps, Wind (FAN) fell 84 bps, and Digital Infrastructure (SRVR) sunk 83 bps.
Commodities & Yields: U.S. Aggregate Bonds (AGG) dropped 47 bps, 20+ Year Treasury Bonds (TLT) fell 74 bps, and the U.S. Dollar (UUP) increased 75 bps on Thursday. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 4.262% and the U.S. 10-Year Treasury Yield stood at 3.650%. Broad Commodities (DJP) declined 53 bps as all broad-based sectors were in the red. Precious Metals (DBP) and Industrial Metals (DBB) both sunk more than 1%. Natural Gas (UNG) rocketed 8.41% and Gold (GLD) dipped 1.30%.
Daily Note
5.18.2023
Equities: Major averages posted strong returns on Wednesday as investor sentiment was lifted by encouraging rhetoric from President Biden and congressional leaders over the impending U.S. debt ceiling deadline. The Dow Jones Industrial Average (DIA) was up 1.29% while the NASDAQ 100 (QQQ) and the S&P 500 (SPY) both rose 1.21%. Small-Caps (IJR) jumped 2.40% and Mid-Caps (IJH) gained 1.74%. House Speaker Kevin McCarthy stated that he does not think the U.S. will default on its debt as tense negotiations over the debt ceiling continue and the White House later echoed that sentiment. Housing starts, which include new construction of both single and multi-family units, rose 2.2% to a seasonally adjusted annual rate of 1.401 million units in April, according to the Census Bureau Wednesday, from March's revised rate of 1.371 million. That was 22.3% below a year ago and slightly above the 1.400 million units estimate. Lingering supplies issues continue to hamper the production of new homes, however. On the earnings front, Target topped quarterly expectations on the top and bottom lines. Total revenue rose nearly 1% from $25.17 billion a year ago, coming in just above analysts’ estimates. Tesla also climbed 4.41% on Wednesday following the company’s annual shareholder meeting the previous day in which Elon Musk told investors that the company was well positioned in the long run despite economic turmoil.
U.S. factor strategies recovered from Tuesday’s losses with all factors seeing gains yesterday. S&P 500 Enhanced Value (SPVU), S&P 500 Pure Value (RPV), and S&P 500 High Beta (SPHB) all advanced more than 2.25% while S&P 500 Dividend (SPYD) gained 1.83% and S&P 500 Growth (SPYG) added 1.03%. Developed ex-U.S. Markets (EFA) added 47 bps with South Korea (EWY) rising 1.91% and the Netherlands (EWN) increasing 1.00%. EFA is trading more than 10% above its 200-day moving average. Gains from Taiwan (EWT, +2.45%) and Brazil (EWZ, +1.42%) bolstered Emerging Markets (EEM, +46 bps) yesterday.
Sectors: Utilities (XLU, -36 bps) and Consumer Staples (XLP, -5 bps) were the only U.S. sector to finish in negative territory on Wednesday. Consumer Discretionary (XLY) and Financials (XLF) led the charge, both climbing more than 2%. XLF received a boost from Regional Banks (KRE, +7.36%) and Banks (KBE, +6.20%). Western Alliance (2.50% weight in KRE and 1.24% weight in KBE) surged more than 10% yesterday after reporting that deposit growth surpassed $2 billion for the quarter as of May 12. The encouraging news lifted other bank stocks. Energy (XLE) and Industrials (XLI) increased 1.92% and 1.72%, respectively, while Technology (XLK), Real Estate (XLRE), and Communication Services (XLC) were all up more than 1.20% on the day. XLK hit new 52-week highs and is nearing overbought territory. XLC sits just 48 bps from 52-week highs and has gained nearly 27% year-to-date.
Themes: Global themes had an excellent showing yesterday with all thematic segments in the green except for Wind (FAN, -39 bps). Clean Energy (PBW, +3.42%) and Blockchain (BLOK, +3.22%) were the top performers followed by Disruptive Tech (ARKW, +2.90%) and Industrial Revolution (ARKQ, +2.62%). Multi-Theme (ARKK), Cannabis (MJ), and Cloud Computing (SKYY) all gained around 2.50% while NextGen Transportation (DRIV) and FinTech (FINX) were both up over 2%. Big Data (AIQ) climbed 1.65% on the day and hit 52-week highs. Of the thematic ETFs with over $50 million in total assets under management, 82 finished higher on Wednesday.
Commodities & Yields: The U.S. Dollar (UUP) added 18 bps, U.S. Aggregate Bonds (AGG) dipped 15 bps, and 20+ Year Treasury Bonds (TLT) fell 29 bps yesterday. At Wednesday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.156% and the U.S. 10-Year Treasury Yield stood at 3.577%. Broad Commodities (DJP) rose 63 bps as Energy (DBE) surged 3.01% and Industrial Metals (DBB) gained 1.70%. WTI Crude Oil (USO) and Gasoline (UGA) were both up over 3% and Copper (CPER) increased 2.49%.
Global Thematic Playbook
5.17.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.17.2023
Equities: Mixed session for U.S. markets on Tuesday as investor confidence was shaken by weaker-than-expected Retail Sales figures for April and disappointing quarterly revenue results from Home Depot. The Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) sunk 1.02% and 67 bps, respectively, while the NASDAQ 100 (QQQ) added 11 bps. Mid-Caps (IJH, -1.47%) and Small-Caps (IJR, -1.32%) were also weak yesterday. Retail Sales increased 0.4% month-over-month in April, below the estimate of +0.8%. Ex-autos sales rose0.4%, in line with expectations. On an annual basis, sales were up just 1.6%, well below the +4.9% Consumer Price Index (CPI) annual increase. Separately, total consumer debt hit new highs in the first quarter, surging above $17 trillion despite a sharp pullback in mortgage borrowing. Industrial Production also rose 0.5% on a monthly basis in April, better than the +0.1% estimate. Cleveland Federal Reserve President Loretta Mester said Tuesday that inflation is too high for the central bank to change policy direction currently. Home Depot reported its largest revenue miss in more than 20 years yesterday and lowered its forecast for this year, as consumers delay large projects and buy fewer big-ticket items. The company said it now expects sales and comparable sales to decline between 2% and 5% for the fiscal year.
All U.S. factor strategies finished lower yesterday with most factors falling more than 1%. S&P 500 High Dividend (SPYD, -2.09%), S&P 500 Pure Growth (RPG, -1.70%), and S&P 500 Pure Value (RPV, -1.68%) were the worst performing factors. Developed ex-U.S. Markets (EFA) declined 95 bps as Australia (EWA), Hong Kong (EWH), the U.K. (EWU), and South Korea (EWY) all slipped more than 1%. Emerging Markets (EEM, -71 bps) were impacted by losses from Brazil (EWZ, -1.92%), South Africa (EZA, -1.32%), Indonesia (EIDO, -1.14%), and China (MCHI, -1.00%).
Sectors: Technology (XLK) inched higher by 11 bps on Tuesday and was the only U.S. sector to post gains. Real Estate (XLRE), Energy (XLE), and Utilities (XLU) lagged, all decreasing more than 2%. XLE was pulled lower by underperformance from Oil & Gas Exploration & Production (XOP, -2.85%) and Oil & Gas Equipment & Services (XES, -2.57%). Materials (XLB) and Industrials (XLI) were both down more than 1.30% while Financials (XLF) dipped 93 bps. XLRE, XLE, XLU, XLF, and XLB are all trading below relative 50-day and 200-day moving averages. Health Care (XLV) and Consumer Staples (XLP) were both lower by around 80 bps. Semiconductors (XSD, +5 bps) was the only industry in the green while Biotech (XBI) and Metals & Mining (XME) declined nearly 3%.
Themes: All global thematic segments finished in the red yesterday except for Big Data (AIQ), which added just 25 bps. Big Data (AIQ) has been one of the best performing segments thus far in 2023, climbing more than 20%. Genomics (ARKG) fell the furthest on Tuesday, dropping 3.34%. Clean Energy (PBW), Multi-Theme (ARKK), Biotech (SBIO), Solar (TAN), and Digital Infrastructure (SRVR) all declined more than 2.25%. Online Retail (IBUY) and Advanced Materials (REMX) were also down 2.15% and 2.02%, respectively. Disruptive Tech (ARKW), Digital Payments (IPAY), Casinos & Gaming (ESPO), and Cannabis (MJ) all decreased at least 1.85% on the day.
Commodities & Yields: Broad Commodities (DJP) dropped 1.41% on Tuesday with all broad-based sectors in the red. Natural Gas (UNG) fell 1.15%, Gold (GLD) dipped 1.25%, and Nickel (JJN) was down 3.29%. The U.S. Dollar (UUP) gained 25 bps, U.S. Aggregate Bonds (AGG) declined 23 bps, and High Yield Corporate Bonds (HYG) sunk 70 bps. At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 4.061% and the U.S. 10-Year Treasury Yield stood at 3.534%.
U.S. Factor Playbook
5.16.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.16.2023
Equities: Ahead of President Biden’s meeting with top congressional leaders on Tuesday regarding debt ceiling negotiations, U.S. markets were higher yesterday. The NASDAQ 100 (QQQ) gained 54 bps, the S&P 500 (SPY) rose 35 bps, and the Dow Jones Industrial Average (DIA) added 17 bps. QQQ sits within 2% of 52-week highs. Small-Caps outperformed with the Russell 2000 (IWM) increasing 1.22%. Investors weighed disappointing data from the Empire State Manufacturing survey, which showed a sharp decline in manufacturing activity in New York. The survey fell about 43 points from April to a reading of -31.8, well below the estimate of -5. On Monday, Atlanta Fed President Raphael Bostic said he doesn’t foresee rate cuts coming this year and that inflation is not going to come down quickly. Minneapolis Fed President Neel Kashkari also stated that the central bank probably has "more work to do on our end, to try to bring inflation back down." On the earnings front, Home Depot is set to report on Tuesday followed by Target on Wednesday and Walmart on Thursday.
All U.S. factor strategies were in the green on Monday except for S&P 500 Low Volatility (SPLV, -52 bps) and S&P 500 Minimum Variance (SPMV, -7 bps). After underperforming last week, S&P 500 High Beta (SPHB, +1.76%) and S&P 500 Pure Value (RPV, +1.39%) outpaced other factors. S&P 500 Quality (SPHQ) and S&P 500 Value (SPVU) also advanced more than 50 bps. Emerging Markets (EEM) climbed 1.84% as China (MCHI) jumped 4.02% yesterday. Developed ex-U.S. Markets (EFA) rose 77 bps on strength from Hong Kong (EWH, +2.82%), South Korea (EWY, +1.60%), and the Netherlands (EWN, +1.34%).
Sectors: Materials (XLB), Technology (XLK), and Financials (XLF) were the best performing U.S. sectors yesterday, all climbing more than 80 bps. XLB was lifted by Newmont Corporation (4.21% weight) which gained 2.50% on Monday after announcing it has agreed it acquire Australian miner Newcrest for $19.2 billion in one of the largest buyouts thus far in 2023. XLF was bolstered by Regional Banks (KRE, +3.16%) and Banks (KBE, +2.84%) while XLK hit new 52-week highs. Energy (XLE), Industrials (XLI), and Communication Services (XLC) all gained around 50 bps. Utilities (XLU) underperformed, declining 1.26%. Consumer Staples (XLP, -25 bps), Real Estate (XLRE, -19 bps), and Health Care (XLV, -17 bps) also posted modest losses on the day.
Themes: Excellent day for global themes on Monday with just one global thematic segment seeing negative returns: Digital Infrastructure (SRVR, -56 bps). Blockchain (BLOK, +3.92%), Evolving Consumer (SOCL, +3.21%), and Genomics (ARKG, +3.18%) led the charge. Multi-Theme (ARKK), eSports & Video Games (ESPO), Online Retail (IBUY), Disruptive Tech (ARKW), Clean Energy (PBW), and Biotech (SBIO) all rose more than 2%. Advanced Materials (REMX) and Cloud Computing (SKYY) were both up 1.96%. SBIO and REMX are nearing overbought territory. Smart Infrastructure (GRID) increased 84 bps to new 52-week highs.
Commodities & Yields: U.S. Aggregate Bonds (AGG) slipped 25 bps, 20+ Year Treasury Bonds (TLT) sunk 1.04%, and the U.S. Dollar (UUP) dipped 28 bps. At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.000% and the U.S. 10-Year Treasury Yield stood at 3.496%. Broad Commodities (DJP) increased 1.32% with Energy (DBE) and Agriculture (DBA) both rising more than 1%. Natural Gas (UNG) jumped 4.52%, Wheat (WEAT) added 3.91%, and Nickel (JJN) slipped 2.03%.
Daily Note
5.15.2023
Equities: On Friday, U.S. markets finished lower amid disappointing Consumer Sentiment data. The tech-heavy NASDAQ 100 (QQQ) dropped 36 bps, the S&P 500 (SPY) fell 13 bps, and the Dow Jones Industrial Average (DIA) dipped just 4 bps. DIA and SPY posted losses for the second consecutvie week, declining 1.05% and 25 bps, respectively, while QQQ gained 66 bps. A preliminary reading on the University of Michigan’s Consumer Sentiment index fell to a six-month low of 57.7 on Friday versus a consensus estimate of 63.0. Inflation expectations for a year from now edged lower to 4.5% but rose on the five-year outlook to 3.2%, tied for the highest since June 2008. Import prices also climbed 0.4% last month, data from the Bureau of Labor Statistics said Friday, marking the first rise so far in 2023. This week, investors will be looking towards Retail Sales figures, Industrial Production data, and key housing reports. Several Federal Reserve officials will also speak, including Fed Chair Jerome Powell on Friday.
U.S. factor strategies were mixed on Friday with S&P 500 Pure Value (RPV) sinking 52 bps and S&P 500 Pure Growth (RPG) adding 31 bps. All factors were in negative territory last week except for S&P 500 Growth (SPYG), which increased 27 bps. RPV was the worst performing factor on the week, declining 2.54%. RPV sits 2.32% from 52-week lows. Developed ex-U.S. Markets (EFA) slipped 18 bps on Friday as Hong Kong (EWH) and South Korea (EWY) both fell more than 1%. Emerging Markets (EEM) decreased 1.18% on weakness from China (MCHI, -2.53%). EFA dropped 1.00% last week while EEM dipped 2.13%.
Sectors: Consumer Discretionary (XLY) retreated 85 bps on Friday and lagged other U.S. sectors. Financials (XLF, -41 bps), Health Care (XLV, -14 bps), and Technology (XLK, -13 bps) were the only other sectors in the red. XLK was dragged lower by Internet (XWEB, -1.50%) and Software & Services (XSW, -70 bps). Utilities (XLU) was the best performing sector, climbing 55 bps, followed by Consumer Staples (XLP, +39 bps). XLP is approaching overbought territory and is trading within 49 bps of 52-week highs. Last week, Communication Services (XLC) jumped 2.37% and XLY rose 43 bps. All other sectors were down for the week last week with Energy (XLE) and Materials (XLB) both dropping around 2%.
Themes: Solar (TAN) shined on Friday, rising 3.05% and outpacing other global thematic segments. TAN received a boost from its top holding, First Solar (11.37% weight), which soared nearly 24% after announcing the acquisition of Evolar AB for up to $80 million. First Solar said move should accelerate its development of next-generation photovoltaic technology. Wind (FAN) also added 88 bps on Friday. Disruptive Tech (ARKW) and Multi-Theme (ARKK) posted the worst returns on Friday, both sinking more than 3%. Cannabis (MJ) was down 2.44% while Online Retail (IBUY), Blockchain (BLOK), and Genomics (ARKG) all declined more than 1.70%. Most segments were lower last week. Cannabis (MJ) plunged nearly 10% while Blockchain (BLOK) slipped 4.11%.
Commodities & Yields: The U.S. Dollar (UUP) increased 64 bps, U.S. Aggregate Bonds (AGG) declined 56 bps, and 20+ Year Treasury Bonds (TLT) slumped 84 bps. At Friday's closing bell, the U.S. 2-Year Treasury Yield stood at 3.994% and the U.S. 10-Year Treasury Yield stood at 3.463%. Broad Commodities (DJP) dipped 7 bps as WTI Crude Oil (USO) dropped 1.87%, Natural Gas (UNG) climbed 3.91% and Tin (JJT) decreased 2.05%.
U.S. Sector & Industry Playbook
5.15.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Size & Style Playbook
5.14.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.12.2023
Equities: U.S. markets were mixed on Thursday despite weaker-than-expected Producer Price Index (PPI) results. The NASDAQ 100 (QQQ) rose 33 bps while the Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) declined 64 bps and 17 bps, respectively. QQQ is on pace for a winning week while DIA and SPY are on pace to post losses for the week. Small-Caps (IJR, -68 bps) and Mid-Caps (IJH, -63 bps) were also weak. The PPI, a measure of prices for final demand goods and services, increased 0.2% in April, against the estimate for +0.3%. Headline PPI rose just 2.3% year-over-year, down from 2.7% in March and the lowest reading since January 2021. Seperately, jobless claims jumped 22K to 264K for the week ended May 6 which was well above the consensus estimate. Tesla gained 2.32% yesterday after Elon Musk announced he would be stepping down as CEO of Twitter. On Friday, two Federal Reserve officials, Mary Daly and James Bullard, will speak.
S&P 500 Growth (SPYG) inched higher by 5 bps yesterday and was the only U.S. factor strategy to see positive returns. S&P 500 Dividend (SPYD, -1.04%) and S&P 500 Pure Value (RPV, -76 bps) were the worst performing factors. SPYD and RPV are both trading within 3% of 52-week lows. Emerging Markets (EEM) dipped 36 bps as South Africa (EZA) plunged 4.05% and China (MCHI) gained 79 bps. Developed ex-U.S. Markets (EFA) sunk 25 bps with South Korea (EWY) falling 1.64% and Australia (EWA) decreasing 1.12%.
Sectors: Communication Services (XLC, +1.00%), Consumer Discretionary (XLY, +46 bps), and Consumer Staples (XLP, +30 bps) were the only U.S. sectors in positive territory yesterday. XLP now sits just 88 bps from52-week highs. Energy (XLE) was the worst performing sector for the second straight session, slipping 1.20%. XLE was dragged lower by Oil & Gas Equipment & Services (XES, -2.79%). Real Estate (XLRE) and Utilities (XLU) were both down more than 1% as well. Utilities (XLU) declined 98 bps as Metals & Mining (XME) sunk 2.81% on the day. All industries finished lower on Thursday with Telecom (XTL, -81 bps) hitting new 52-week lows.
Themes: Global thematic segments were split yesterday. Cannabis (MJ) plummeted 6.55% while Blockchain (BLOK) and Biotech (SBIO) slumped 2.51% and 2.02%, respectively. Genomics (ARKG), 3D Printing (PRNT), Connectivity (FIVG), and Wind (FAN) all declined more than 1%. eSports & Video Games (ESPO) was the best performing segment, climbing 1.15%. Evolving Consumer (SOCL) and Digital Payments (IPAY) both rose around 50 bps. The KraneShares CSI China Internet ETF (KWEB) posted the best returns amongst thematic segments yesterday, jumping 3.34%. Meanwhile, the AdvisorShares Pure US Cannabis ETF (MSOS) was the worst performing thematic ETF, dropping 8.30%.
Commodities & Yields: At Thursday's closing bell, the U.S. 2-Year Treasury Yield stood at 3.895% and the U.S. 10-Year Treasury Yield stood at 3.379%. The U.S. Dollar (UUP) increased 65 bps, U.S. Aggregate Bonds (AGG) rose 30 bps, and 20+ Year Treasury Bonds (TLT) gained 1.06%. Broad Commodities (DJP) fell 1.69% with all broad-based sectors posting losses. WTI Crude Oil (USO) sunk 1.77%, Silver (SLV) declined 4.76%, and Copper (CPER) decreased 3.72%.
Daily Note
5.11.2023
Equities: On Wednesday, the NASDAQ 100 (QQQ) climbed 1.09% and the S&P 500 (SPY) rose 47 bps while the Dow Jones Industrial Average (DIA) dipped 8 bps. Investors weighed a cooler-than-expected Consumer Price Index (CPI) report for April. The index increased 0.4% month-over-month and 4.9% year-over-year. Excluding volatile food and energy categories, core CPI rose 0.4% monthly and 5.5% from a year ago, both in line with expectations. Increases in shelter, gasoline and used vehicles pushed the index higher, and were offset somewhat by declines in prices for fuel oil, new vehicles and food at home. Treasury yields fell sharply following the results with the U.S. 2-Year dropping below 3.90% and the U.S. 10-Year decreasing below3.45% intraday yesterday. Airbnb and Twilio were each down more than 10% on Wednesday after reporting disapointing quarterly earnings results. Disney posted revenue and earnings that were in line with expectations but also reported that its streaming losses narrowed as price increases helped offset the loss of 4 million subscribers at Disney+. On Thursday, investors will be focused on the Producer Price Index (PPI) data and a speech from Federal Reserve offical Christopher Waller.
U.S. factor strategies were split on Wednesday with S&P 500 Pure Value (RPV) sinking 85 bps and S&P 500 Growth (SPYG) gaining 66 bps. RPV is approaching oversold territory and sits just 3.64% from 52-week lows. Developed ex-U.S. Markets (EFA) fell 20 bps with Switzerland (EWL) and Japan (EWJ) both declining at least 50 bps. Emerging Markets (EEM) inched lower by 5 bps as South Africa (EZA) slipped 1.14% and China (MCHI) decreased another 38 bps. EEM is trading just above its 50-day and 200-day moving averages.
Sectors: Energy (XLE) sunk 1.13% yesterday and lagged other U.S. sectors. Financials (XLF, -56 bps), Industrials (XLI, -36 bps), and Consumer Staples (XLP, -16 bps) were the only other sectors to post losses on the day. XLE and XLF are the only sectors trading below relative 50-day and 200-day moving averages. Technology (XLK) sa w the best returns, climbing 1.22%. XLK was lifted by Internet (XWEB, +2.38%), Software & Services (XSW, +2.03%), and Semiconductors (XSD, +1.36%). XLK is up over 22% so far this year and currently sits at 52-week highs. Real Estate (XLRE), Utilities (XLU), and Communication Services (XLC) were all up around 90 bps while Consumer Discretionary (XLY) added 51 bps.
Themes: Digital Payments (IPAY) and Casinos & Gaming (ESPO) were the only global thematic segments to finish lower on Wednesday, declining 1.03% and 13 bps, respectively. BETZ is still up more than 20% thus far in 2023. Genomics (ARKG), 3D Printing (PRNT), and Cloud Computing (SKYY) all gained more than 2% while Blockchain (BLOK) and Advanced Materials (REMX) both rose 1.99%. Cyber Security (HACK, +1.90%), Cannabis (MJ, +1.74%), Multi-Theme (ARKK, +1.41%), and Clean Energy (PBW, +1.35%) were also strong. The KraneShares CSI China Internet ETF (KWEB) dropped 37 bps and is approaching oversold territory.
Commodities & Yields: Broad Commodities (DJP) slumped 84 bps as Natural Gas (UNG) sunk 3.47%, Nickel (JJN) fell 4.13%, and Silver (SLV) dropped 72 bps. The U.S. Dollar (UUP) dipped 18 bps, U.S. Aggregate Bonds (AGG) increased 65 bps, and 20+ Year Treasury Bonds (TLT) rose 97 bps. At the close on Wednesday, the U.S. 2-Year Treasury Yield stood at 3.908% and the U.S. 10-Year Treasury Yield stood at 3.437%.
Global Thematic Playbook
5.10.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.10.2023
Equities: U.S. markets posted losses yesterday as investors digested the latest corporate earnings results, comments from Federal Reserve officials, and updates ahead of the deadline to raise the debt ceiling. The NASDAQ 100 (QQQ) slipped 63 bps, the S&P 500 (SPY) fell 44 bps, and the Dow Jones Industrial Average (DIA) dipped 13 bps. Software company Palantir jumped more than 23% on Tuesday after beating analyst estimates on the top and bottom lines with quarterly revenue increasing 18% year-over-year. Under Armour sunk 5.66% after the company projected earnings per share and revenue to be short of Wall Street expectations for the full year. After the closing bell, Airbnb released first-quarter earnings that beat analyst estimates but offered slightly weaker-than-expected guidance and a cautious outlook for Q2. New York Federal Reserve President John Williams on Tuesday cautioned that he doesn’t expect inflation to return to the Fed’s 2% goal until the next two years. He also added that unemployment is likely to rise to a 4%-4.5% range, from its current 54-year low of 3.4%. President Biden met with congressional leaders weeks before the deadline to raise the debt ceiling. The U.S. risks a default and economic catastrophe if Congress fails to hike the borrowing limit. House Speaker Kevin McCarthy said he would reject any three-month debt ceiling proposals. The Consumer Price Index (CPI) results will be released on Wednesday followed by the Producer Price Index (PPI) results on Thursday.
S&P 500 High Beta (SPHB) and S&P 500 Pure Value (RPV) lagged other U.S. factor strategies on Tuesday, dropping 84 bps and 60 bps, respectively. All U.S. factors were in negative territory for the day. Emerging Markets (EEM) were down 61 bps as South Africa (EZA) fell 2.83% and China (MCHI) declined 1.58%. China’s exports grew 8.5% year-on-year in April, marking a second-straight month of growth after the economy saw a surprise jump of 14.8% in March, government data showed. Imports fell by 7.9% for the month. Developed ex-U.S. Markets (EFA) decreased 41 bps with Hong Kong (EWH) declining 1.55% and Japan (EWJ) gaining 1.08%.
Sectors: Industrials (XLI, +22 bps) and Energy (XLE, +4 bps) were the only U.S. sectors to see positive returns yesterday. Meanwhile, Materials (XLB) dropped 91 bps and Technology (XLK) fell 77 bps. XLK was dragged lower by Semiconductors (XSD), which sunk 1.71%. XSD has slipped 10.23% over the past month and is approaching oversold territory. Health Care (XLV) and Communication Services (XLC) both sunk more than 60 bps and Financials (XLF), Real Estate (XLRE), and Consumer Staples (XLP) were all down more than 30 bps. Biotech (XBI, +1.07%) and Aerospace & Defense (XAR, +96 bps) were the top performing industries on the day.
Themes: Biotech (SBIO), Genomics (ARKG), and Multi-Theme (ARKK) posted the best returns amongst global thematic segments on Tuesday, all climbing more than 1%. SBIO entered overbought territory. Disruptive Tech (ARKW) also gained 57 bps while Casinos & Gaming (ESPO) and Cloud Computing (SKYY) both added around 30 bps. Cannabis (MJ underperformed, dropping 2.27%. MJ is still trading 26.57% below its 200-day moving average. Connectivity (FIVG), Digital Payments (IPAY), FinTech (FINX), and Solar (TAN) all fell at at least 1%. IPAY was pulled lower by PayPal (6.21% weight), which plunged 12.73% yesterday after issuing weaker-than-expected guidance for the current period. The payments company did post a beat on the top and bottom lines, however.
Commodities & Yields: U.S. Aggregate Bonds (AGG) dipped 9 bps, 20+ Year Treasury Bonds (TLT) declined 36 bps, and the U.S. Dollar (UUP) added 32 bps yesterday. At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 4.033% and the U.S. 10-Year Treasury Yield stood at 3.526%. Broad Commodities (DJP) rose 3 bps with all broad based sectors in the green except for Industrial Metals (DBB, -42 bps). Natural Gas (UNG) gained 1.53%, Gold (GLD) increased 71 bps, and Nickel (JJN) dropped 5.66%.
U.S. Factor Playbook
5.9.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.9.2023
Equities: U.S. markets were relatively flat on Monday ahead of this week’s Consumer Price Index (CPI) and Producer Price Index (PPI) results. The NASDAQ 100 (QQQ) increased 25 bps, the S&P 500 (SPY) added 3 bps, and the Dow Jones Industrial Average (DIA) dipped 15 bps. All three major averages are trading within 4% of 52-week highs. Treasury yields increased yesterday with the U.S. 2-Year rising back above 4% and the U.S. 10-Year jumping above 3.50%. On the earnings front, Berkshire Hathaway reported strong quarterly results for the first quarter on as operating earnings jumped 12.6% year-over-year. The company’s cash hoard also increased to $130.616 billion from $128 billion in the fourth quarter of 2022. Cloud security company Zscaler rallied 22% yesterday on strong preliminary earnings and full-year guidance. Preliminary revenue, non-GAAP operating income and billings for the company’s third quarter all came in above respective consensus estimates and the company also raised its full-year guidance. Disney is slated to report quarterly results on Wednesday.
U.S. factor strategies were mixed yesterday with S&P 500 Dividend (SPYD, -35 bps) and S&P 500 Pure Growth (RPG, -28 bps) falling the furthest. S&P 500 High Beta (SPHB) saw the best returns amongst U.S. factors, adding 27 bps. Developed ex-U.S. Markets (EFA) inched higher by 3 bps with Germany (EWG) slipping 24 bps and Switzerland (EWL) rising 25 bps. EFA and EWL are both trading at 52-week highs. Emerging Markets (EEM) added 5 bps as Indonesia (EIDO) declined 1.11% and India (INDA) rose 31 bps. INDA sits in overbought territory.
Sectors: Communication Services (XLC) jumped 1.01% on Monday and handily outpaced other U.S. sectors. XLC has been the top performing sector year-to-date, climbing 23.11%. Consumer Discretionary (XLY, +34 bps) and Financials (XLF, +15 bps) were the only other sectors in positive territory. Real Estate (XLRE) was the worst performing sector, falling 69 bps, while Industrials (XLI), Materials (XLB), and Consumer Staples (XLP) all sunk around 30 bps. Energy (XLE) was flat on the day. On the industry level, Internet (XWEB) surged 2.71% while Regional Banks (KRE) sunk another 2.01%. Telecom (XTL) slipped 68 bps to new 52-week lows.
Themes: Most global thematic segments finished higher yesterday with Online Retail (IBUY, +1.93%), Advanced Materials (REMX, +1.92%), and Cyber Security (HACK, +1.87%) outperforming. eSports & Video Games (ESPO) advanced 1.33%, Cloud Computing (SKYY) and Multi-Theme (ARKK) were both up 1.15%, and Disruptive Tech (ARKW) added 1.00%. Blockchain (BLOK) trailed other segments, declining 1.91%. Solar (TAN) decreased 37 bps and is approaching oversold territory. TAN has fallen more than 10% over the past 3 months.
Commodities & Yields: The U.S. Dollar (UUP) added 14 bps, U.S. Aggregate Bonds (AGG) declined 55 bps, and 20+ Year Treasury Bonds (TLT) dropped 1.40%. At Monday’s close, the U.S. 2-Year Treasury Yield stood at 4.012% and the U.S. 10-Year Treasury Yield stood at 3.517%. Broad Commodities (DJP) increased 62 bps on strength from Energy (DBE, +1.66%). Natural Gas (UNG) climbed 5.83%, Gasoline (UGA) rose 2.88%, and Coffee (JO) slipped 1.88%.
U.S. Sector & Industry Playbook
5.8.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.8.2023
Equities: Despite a hotter-than-expected Employment Situation report, U.S. markets posted solid returns on Friday with the NASDAQ 100 (QQQ) rising 2.13%, the S&P 500 (SPY) climbing 1.85%, and the Dow Jones Industrial Average (DIA) gaining 1.26%. Last week, DIA and SPY declined 1.26% and 79 bps, respectively, while QQQ added 10 bps. Nonfarm payrolls increased 253K in April, well above the +180K estimate. The unemployment rate stood at 3.4% versus a 3.6% estimate and tied for the lowest level since 1969. Investor sentiment was boosted by encouraging earnings and revenue results from Apple after the close on Thursday, which came in above analysts' expectations. Apple jumped nearly 5% on the day, lifting other tech names. JPMorgan upgraded Western Alliance, Zions Bancorp, and Comerica on Friday stating they all appear to be "substanially mispriced" in large part due to short selling. Western Alliance surged 49.23% on the day and the news buoyed other regional banks names. This week, investors will be looking towards Consumer Price Index (CPI) data, Producer Price Index (PPI) results, and Consumer Sentiment figures along with several speeches from Federal Reserve officials.
All U.S. factor strategies saw positive returns on Friday, but finished lower last week. S&P 500 Pure Value (RPV) jumped 2.33% on Friday but fell 3.56% last week while S&P 500 Pure Growth (RPG) rose 2.03% on Friday and slipped 2.18% last week. RPV and RPG are trading below relative 50-day and 200-day moving averages. Emerging Markets (EEM) increased 1.34% on Friday as Brazil (EWZ) gained 3.94% and China (MCHI) increased 1.10%. Developed ex-U.S. Markets (EFA) climbed 1.47% as Australia (EWA, +2.82%), the U.K. (EWU, +1.71%), and the Netherlands (EWN, +1.71%) were all strong. EEM added 66 bps last week while EFA increased 35 bps. EFA sits at 52-week highs.
Sectors: All U.S. sectors were in positive territory on Friday led by Energy (XLE, +2.71%), Technology (XLK, +2.51%), and Financials (XLF, +2.47%). XLF was lifted by Regional Banks (KRE, +6.29%) and Banks (KBE, +5.49%) which both rose from 52-week lows. Oil & Gas Exploration & Production (XOP) and Oil & Gas Equipment & Services (XES) both advanced more than 3% on the day, providing a boost from XLE. XLK is trading just 21 bps from 52-week highs. Consumer Discretionary (XLY) added 2.02% while Materials (XLB), Real Estate (XLRE), Industrials (XLI), and Communication Services (XLC) all added more than 1%. Telecom (XTL) was the only industry in the red on Friday, dipping 87 bps to new 52-week lows. Last week, XLE plunged 5.76% while XLK rose just 27 bps. Most sectors saw losses for the week. KRE was down more than 10% on the week,
Themes: Excellent day for global thematic segments on Friday as all segments increased more than 1%. Cannabis (MJ) was the best performing segment, surging nearly 6%, while Disruptive Tech (ARKW), Multi-Theme (ARKK), and Clean Energy (PBW) all jumped more than 4%. Blockchain (BLOK, +3.91%), Advanced Materials (REMX, +3.76%), FinTech (FINX, +3.37%), and NextGen Transportation (DRIV, +3.19%) also posted solid gains. Digital Infrastructure (SRVR) added 1.23% and is now trading just 7 bps from 52-week highs. Last week, most segments finished higher led by Cannabis (MJ) and Biotech (SBIO), which both rose more than 6.85%. 3D Printing (PRNT) and Solar (TAN) were the worst performing segments for the week, both falling 2.47%.
Commodities & Yields: At Friday's closing bell, the U.S. 2-Year Treasury Yield stood at 3.912% and the U.S. 10-Year Treasury Yield stood at 3.433%. The U.S. Dollar (UUP) sunk 14 bps, U.S. Aggregate Bonds (AGG) dipped 32 bps, and Preferred & Income Securities (PFF) increased 1.47% on Friday. Broad Commodities (DJP) added 1.55% as Energy (DBE) climbed 3.38% and Precious Metals (DBP) declined 1.42%. WTI Crude Oil (USO) was up 3.84%, Gasoline (UGA) rose 2.57%, and Gold (GLD) slipped 1.56%.
U.S. Size & Style Playbook
5.8.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.5.2023
Equities: U.S. markets finished lower for the 4th consecutive session on Thursday as investors weighed the latest interest rate hike from the Federal Reserve, continued turmoil in regional bank stocks, and sinking treasury yields. The Dow Jones Industrial Average (DIA) was down 83 bps, the S&P 500 (SPY) fell 71 bps, and the NASDAQ 100 (QQQ) declined 35 bps. PacWest plummeted more than 50% yesterday and was halted for volatility several times. The California based regional bank announced it is exploring strategic options, including a potential sale. Additionally, First Horizon plunged 33% after announcing the merger agreement with TD Bank would be terminated. Western Alliance also sunk 28% on the day. Following the 10th interest rate increase by the Fed in just over a year, the U.S. 2-Year continued its slide, sinking below 3.70% intraday Thursday. On the earnings front, Paramount Global declined more than 28% after reporting weak quarterly results and slashing its quarterly dividend from 24 cents to 5 cents. Qualcomm reported earnings figures that were in line with estimates but issued weak forward guidance. After the close, Apple reported earnings and revenue results that topped expectations. iPhone sales were better-than-expected, but the company’s overall sales fell the 2nd straight quarter. Jobless claims increased 13K to 242K for the week ended April 29, which was higher than the 236K estimate. Investors will be looking towards Friday’s Employment Situation report.
Value oriented pockets of the markets underperformed yesterday as S&P 500 Pure Value (RPV) sunk 3.04%. All U.S. factor strategies saw losses on the day with S&P 500 Pure Growth (RPG) slipping 1.54%, S&P 500 Dividend (SPYD) dropping 1.25%, and S&P 500 Quality (SPHQ) declining 78 bps. Emerging Markets (EEM) rose 80 bps as China (MCHI, +1.70%) recovered. South Africa (EZA) also fell 1.06%. Developed ex-U.S. Markets (EFA) dipped 21 bps with .
Sectors: Real Estate (XLRE) and Utilities (XLU) were the only U.S. sectors to post gains yesterday, rising 92 bps and 75 bps, respectively. Communication Services (XLC), Financials (XLF), Energy (XLE), and Industrials (XLI) were all down more than 1% while Consumer Discretionary (XLY), Materials (XLB), and Technology (XLK) all declined more than 50 bps. Regional Banks (KRE, -5.07%) and Banks (KBE, -4.00%) hit new 52-week lows and dragged XLF lower. XLF has dropped 6.50% so far this week while XLE has decreased 8.25%.
Themes: Biotech (SBIO) surged 4.23% yesterday and handily outpaced other global thematic segments. SBIO has jumped 12.95% over the past month and is nearing overbought territory. Genomics (ARKG) gained 2.12%, Clean Energy (PBW) rose 1.18% after hitting 52-week lows on Tuesday, and Space (UFO) increased 82 bps. Disruptive Tech (ARKW), Blockchain (BLOK), Connectivity (FIVG), and Cloud Computing (SKYY) were all down more than 1%. ARKW has slipped 13.43% in the last month and is approaching oversold territory. The worst performing thematic ETF on Wednesday was the AdvisorShares Pure US Cannabis ETF (MSOS, -5.15%). MSOS has fallen 23.61% year-to-date.
Commodities & Yields: The U.S. Dollar (UUP) added 11 bps, U.S. Aggregate Bonds (AGG) dipped 11 bps, and 20+ Year Treasury Bonds (TLT) declined 99 bps. At Friday’s closing bell, the U.S. 2-Year Treasury Yield stood at 3.772% and the U.S. 10-Year Treasury Yield stood at 3.366%. Broad Commodities (DJP) increased 23 bps as.
Daily Note
5.4.2023
Equities: The losing streak for U.S. markets was extended to three consecutive session on Wednesday after the U.S. Federal Reserve hiked interest rates by another 25 bps, marking the 10th interest rate increase in just over a year. The Dow Jones Industrial Average (DIA) sunk 82 bps, the S&P 500 (SPY) slipped 69 bps, and the NASDAQ 100 (QQQ) dropped 65 bps. All three major averages are still trading above relative 50-day and 200-day moving averages. Small-Caps outperformed with the Russell 2000 (IWM) gaining 37 bps. The latest increase brings the fed funds rate to a target range of 5%-5.25%, the highest since August 2007. In a post decision press conference, Fed Chairman Jerome Powell stated, “inflation has moderated somewhat since the middle of last year, nonetheless inflation pressures continue to run high and the process of getting inflation back down to 2% has a long way to go.” Treasury yields decreased following the rate hike with the U.S. 2-Year dropping below 3.90% and the U.S. 10-Year nearing 3.35%. After the close, PacWest Bancorp plummeted following a report that the bank is weighing strategic options, including a potential sale. Investors will be looking towards Apple’s earnings results after the close on Thursday as well as Jobless Claims data.
All U.S. factor strategies saw negative returns on Wednesday. S&P 500 Enhanced Value (SPVU) dropped 1.10% while S&P 500 Dividend (SPYD), S&P 500 Value (SPYV), and S&P 500 Pure Growth (RPG) all declined at least 75 bps. Emerging Markets (EEM) dipped 16 bps as Brazil (EWZ) climbed 95 bps, Indonesia (EIDO) sunk 45 bps, and China (MCHI) was down 19 bps. Developed ex-U.S. Markets (EFA) added 26 bps on strength from Switzerland (EWL, +1.04%) and Japan (EWJ, +60 bps). EWL is up nearly 16% thus far in 2023 and sits at 52-week highs.
Sectors: All U.S. sectors were in the red yesterday after 10 of the 11 sectors posted losses on Tuesday. Energy (XLE, -1.89%) was once again impacted by weakness from Oil & Gas Exploration & Production (XOP, -1.95%) and Oil & Gas Equipment & Services (XES, -1.30%). Financials (XLF, -1.14%) finished lower as Regional Banks (KRE, -1.80%) and Banks (KBE, -1.62%) dropped to new 52-week lows. XOP, XES, KRE, and KBE are all approaching oversold territory. Materials (XLB) declined 1.10% while Technology (XLK), Consumer Staples (XLP), and Consumer Discretionary (XLY) all fell more than 75 bps. Health Care (XLV) was the best performing sector, dipping just 13 bps. Telecom (XTL) sunk 24 bps to new 52-week lows.
Themes: Biotech (SBIO) surged 4.23% yesterday and handily outpaced other global thematic segments. SBIO has jumped 12.95% over the past month and is nearing overbought territory. Genomics (ARKG) gained 2.12%, Clean Energy (PBW) rose 1.18% after hitting 52-week lows on Tuesday, and Space (UFO) increased 82 bps. Disruptive Tech (ARKW), Blockchain (BLOK), Connectivity (FIVG), and Cloud Computing (SKYY) were all down more than 1%. ARKW has slipped 13.43% in the last month and is approaching oversold territory. The worst performing thematic ETF on Wednesday was the AdvisorShares Pure US Cannabis ETF (MSOS, -5.15%). MSOS has fallen 23.61% year-to-date.
Commodities & Yields: Broad Commodities (DJP) declined 98 bps on Wednesday as Energy (DBE) fell another 3.52%. Gasoline (UGA) and WTI Crude Oil (USO) declined 5.41% and 4.35%, respectively, while Gold (GLD) gained 85 bps. U.S. Aggregate Bonds (TLT) added 44 bps, Preferreds (PFF) sunk 1.57%, and the U.S. Dollar (UUP) dipped 54 bps. At the closing bell on Wednesday, the U.S. 2-Year Treasury Yield stood at 3.858% and the U.S. 10-Year Treasury Yield stood at 3.356%.
Global Thematic Playbook
5.3.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.3.2023
Equities: Ahead of Wednesday’s interest rate decision by the Federal Open Market Committee (FOMC), U.S. markets slipped once again yesterday with the S&P 500 (SPY) sinking 1.12%, the Dow Jones Industrial Average (DIA) dropping 1.03%, and the NASDAQ 100 (QQQ) declining 87 bps. Small-Caps underperformed as the Russell 2000 (IWM) decreased 2.05%. Treasury yields fell sharply with the U.S. 2-Year dropping below 4% and the U.S. 10-Year approaching 3.40%. Tuesday’s Job Openings & Labor Turnover (JOLTS) results indicated that the labor market may be loosening. Job vacancies for March totaled 9.59 million, down from 9.97 million the previous month. This is the lowest level of job openings since April 2021 and there are now around 1.6 open jobs per available worker. Separately, orders for manufactured goods in March increased 0.9%, which missed the +1.3% growth expectation. Uber reported first-quarter results yesterday that topped analysts’ expectations for revenue. Revenue for the quarter was up 29% year-over-year. Morgan Stanley will also reportedly cut around 3,000 positions by the end of June. After the close, Starbucks posted better-than-expected quarterly results for earnings and revenue amid strong figures in China. Ford also posted a significant beat on earnings (63 cents adj. vs 41 cents adj expected) while Advanced Micro Devices reported a 9% yearly decline in revenue stemming from slowing PC chip sales. According to the CME FedWatch Tool, there is an 85.1% chance that the Federal Reserve will hike interest rates another 25 bps on Wednesday and a 14.9% chance of no rate increase.
All U.S. factor strategies finished lower on Tuesday with S&P 500 Enhanced Value (SPVU, -2.39%), S&P 500 Dividend (SPYD, -2.24%), and S&P 500 Pure Growth (RPG, -2.13%) falling the furthest. Most factors were down more than 1.50% on the day. Developed ex-U.S. Markets (EFA) dropped 1.01% as Hong Kong (EWH) declined 1.73% and Germany (EWG) slipped 1.33%. Emerging Markets (EEM, -97 bps) were pulled lower by Brazil (EWZ, -2.53%) and China (MCHI, -1.83%). MCHI has decreased 6.47% in the last month and is trading below its 50-day and 200-day moving averages.
Sectors: Consumer Discretionary (XLY) added 10 bps and was the lone U.S. sector to post gains on Tuesday. Energy (XLE) and Financials (XLF) declined 4.35% and 2.27%, respectively, while Communication Services (XLC), Real Estate (XLRE), Utilities (XLU), and Industrials (XLI) all dropped more than 1%. XLE was dragged lower by underperformance from Oil & Gas Equipment & Services (XES, -6.06%) and Oil & Gas Exploration & Production (XOP, -4.61%). XLF was once again impacted by losses from Regional Banks (KRE, -6.27%) and Banks (KBE, -5.19%), which are both now trading at 52-week lows. Materials (XLB) and Technology (XLK) each sunk more than 90 bps on theday.
Themes: All global thematic segments saw negative returns yesterday, except for Blockchain (BLOK), which gained 99 bps. Blockchain (BLOK) has been the best performing segment year-to-date, rising nearly 28%. Most segments declined more than 1.75% yesterday. Solar (TAN, -3.26%) and Genomics (ARKG, -3.22%) were the worst performers followed by Biotech (SBIO, -2.65%) and Cloud Computing (SKYY, -2.59%). Online Retail (IBUY), Digital Payments (IPAY), Cyber Security (HACK), Evolving Consumer (SOCL), Multi-Theme (ARKK), FinTech (FINX), 3D Printing (PRNT), and Cannabis (MJ) were all down more than 2%. HACK entered oversold territory. Clean Energy (PBW) fell 1.70% to new 52-week lows.
Commodities & Yields: The U.S. Dollar (UUP) dipped 25 bps, U.S. Aggregate Bonds (AGG) gained 97 bps, and 20+ Year Treasury Bonds (TLT) jumped 2.49% yesterday. At Tuesday's close, the U.S. 2-Year Treasury Yield stood at 3.986% and the U.S. 10-Year Treasury Yield stood at 3.428%. Broad Commodities (DJP) declined 1.57% as Energy (DBE) plummeted 4.23% and Industrial Metals (DBB) fell 1.76%. Precious Metals (DBP) were higher by 1.80%.
U.S. Factor Playbook
5.2.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Sector & Industry Playbook
5.2.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
5.2.2023
Equities: U.S. markets ended a two day winning streak on Monday as investors weighed the news that JPMorgan emerged as the winner of the weekend auction for First Republic. The Dow Jones Industrial Average (DIA) fell 20 bps while the NASDAQ 100 (QQQ) and the S&P 500 (SPY) dropped 11 bps and 10 bps, respectively. After its failure in March, First Republic was taken over by regulators on Monday and JPMorgan will be getting around $92 billion in deposits in the deal, which includes the $30 billion that it and other large banks put into First Republic last month. The bank is taking on $173 billion in loans and $30 billion in securities as well. On the economic front, manufacturing activity in the U.S. contracted for the 6th conecutive month in April, according to a report Monday from the Institute for Supply Management. The ISM Manufacturing PMI came in at 47.1%, which represents the share of companies reporting expansion for the month. That was higher than the 46.3% in March and better than the 46.7% estimate.
U.S. factor strategies were mixed yesterday led by S&P 500 Low Volatility (SPLV, +47 bps) and S&P 500 Pure Growth (RPG, +26 bps). Meanwhile, S&P 500 Dividend (SPYD, -63 bps) and S&P 500 Pure Value (RPV, -58 bps) underperformed. Over the past three months, RPG has outpaced RPV by over 10%. SPYD and RPV are both trading below relative 50-day and 200-day moving averages. Developed ex-U.S. Markets (EFA, -15 bps) were pulled lower by South Korea (EWY, 66 bps) and the U.K. (EWU, -32 bps). Emerging Markets (EEM) declined 33 bps as Brazil (EWZ) decreased 81 bps, South Africa (EZA) fell 68 bps, and China (MCHI) dropped another 40 bps.
Sectors: Energy (XLE) retreated 1.13% and was the worst performing U.S. sector on Monday. Consumer Discretionary (XLY) and Real Estate (XLRE) were both down more than 90 bps while Finanacials (XLF) dipped 27 bps. XLF was impacted by losses from Regional Banks (KRE, -2.81%) and Banks (KBE, -2.21%). KRE and KBE are both trading within 2% of 52-week lows. Industrials (XLI) and Health Care (XLV) both gained mroe than 50 bps on the day with XLV receiving a boost from Biotech (XBI, +2.33%). Utilities (XLU), Consumer Staples (XLP), and Technology (XLK) all posted modest gains. XLP hit new 52-week highs and XLK sits just 42 bps from 52-week highs.
Themes: The majority of global thematic segments were lower on Monday as Blockchain (BLOK) plunged 3.67% and Clean Energy (PBW) declined 2.29%. PBW now sits 38 bps from 52-week lows and is approaching oversold territory. FinTech (FINX), Advanced Materials (REMX), Disruptive Tech (ARKW), Solar (TAN), and Digital Payments (IPAY) all dropped more than 1%. Cyber Security (HACK) fell 65 bps and is also nearing oversold territory. Biotech (SBIO) climbed 2.13% yesterday, handily outgaing other segments. Casinos & Gaming (BETZ, +1.65%), Genomics (ARKG, +83 bps), Water (PHO, +65 bps), and Cannabis (MJ, +60 bps) also saw solid returns.
Commodities & Yields: U.S. Aggregate Bonds (AGG) sunk 1.02%, 20+ Year Treasury Bonds (TLT) decreased 2.88%, and the U.S. Dollar (UUP) rose 50 bps. At Monday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.145% and the U.S. 10-Year Treasury Yield stood at 3.589%. Broad Commodities (DJP) finished down 54 bps with Natural Gas (UNG) falling 3.57%, WTI Crude Oil (USO) declining 1.41%, and Copper (CPER) adding 1.13%.
Daily Note
5.1.2023
Equities: On Friday, U.S. markets finished higher for the second consecutive session as the S&P 500 (SPY) added 85 bps, the Dow Jones Industrial Average (DIA) gained 84 bps, and the NASDAQ 100 (QQQ) rose 69 bps. Last week, QQQ climbed 1.88%, SPY was up 90 bps, and DIA increased 86 bps. All three major averages gained more than 5% in April. According to economic data released Friday, the personal consumption expenditures price index (PCE) excluding food and energy increased 0.3% for the month, in line with estimates. On an annual basis, core PCE increased 4.6%, slightly higher than the expectation for 4.5% and down 0.1 percentage point from February. First Republic plunged another 43.30% on Friday after the FDIC asked other banks for potential bids for the bank. On the earnings front, oil majors Exxon Mobil and Chevron both beat Wall Street’s expectations for first-quarter earnings, despite the pullback in oil prices. This week, investors will be looking towards ISM Manufacturing data, Job Openings & Labor Turnover (JOLTS) results, the Employment Situation report, and the interest rate decision by the Federal Reserve on Wednesday.
S&P 500 Pure Value (RPV) jumped 1.71% on Friday and outpaced other U.S. factor strategies once again. S&P 500 High Beta (SPHB, +1.68%) and S&P 500 Pure Growth (RPG, +1.22%) also posted solid returns. RPV rose 88 bps last week while SPHB declined 66 bps and RPG dropped 49 bps. All factors were in the green in April with S&P 500 Value (SPYV) gaining 5.29%. Emerging Markets (EEM) increased 51 bps on Friday as Mexico (EWW) added 1.79%. Developed ex-U.S. Markets (EFA) dipped 4 bps on the day with Japan (EWJ) falling 79 bps. EFA was lower by 1 bps last week while EEM rose 31 bps. EFA was up 5.93% in April and EEM added just 31 bps.
Sectors: All U.S. sectors saw positive returns on Friday except Utilities (XLU), which sunk 14 bps. Energy (XLE), Financials (XLF), Materials (XLB), Real Estate (XLRE), and Technology (XLK) all climbed more than 1% while Industrials (XLI), Communication Services (XLC), and Health Care (XLV) all gained at least 85 bps. Consumer Staples (XLP) added 53 bps, hit 52-week highs, and entered overbought territory. XLK is trading just 48 bps from 52-week highs. Last week, XLU was down 92 bps and XLC jumped 3.83%. In April, all sectors were up, led by XLC and XLRE, which both surged more than 7%. XLI lagged other sectors for the month, gaining just 1.81%.
Themes: Most global thematic segments finished in positive territory on Friday with Biotech (SBIO, +1.84%) outperforming. Digital Payments (IPAY), 3D Printing (PRNT), Advanced Materials (REMX), and FinTech (FINX) all rose more than 1.25%. Meanwhile, Cyber Security (HACK), Solar (TAN), and Evolving Consumer (SOCL) all declined more than 1% on the day. Last week, thematic segments were split with Solar (TAN) dropping 7.37% and Cannabis (MJ) rising 3.11%. In April, Cannabis (MJ) dipped 5.41% while Biotech (SBIO), Casinos & Gaming (BETZ), and Blockchain (BLOK) all jumped more than 10%.
Commodities & Yields: At Friday’s close, the U.S. 2-Year Treasury Yield stood at 4.046% and the U.S. 10-Year Treasury Yield stood at 3.435%. The U.S. Dollar (UUP) added 14 bps, U.S. Aggregate Bonds (AGG) rose 51 bps, and 20+ Year Treasury Bonds (TLT) jumped 1.61%. TLT was up 2.10% in April. Broad Commodities (DJP) rose 1.00% on Friday as WTI Crude Oil (USO) gained 2.57%, Lead (LD) rose 1.99%, and Tin (JJT) increased 1.61%.
U.S. Size & Style Playbook
4.30.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
4.28.2023
Equities: U.S. markets surged on Thursday as investors weighed a slew corporate earnings results with the NASDAQ 100 (QQQ) climbing 2.72%, the S&P 500 (SPY) rising 1.98%, and the Dow Jones Industrial Average (DIA) gaining 1.57%. Meta Platforms jumped nearly 14% after encouraging quarterly results after the bell on Wednesday, lifting other tech names. Honeywell topped expectations on the top and bottom lines, Hasbro beat revenue and earnings estimates, and CBRE also issued impressive quarterly results. Southwest Airlines, Caterpillar, Intel, AbbVie, and Dominos all posted disappointing quarterly figures. Intel reported a staggering 133% annual reduction in earnings per share and the largest quarterly loss in company history. After the close, reported first-quarter revenue that topped analysts’ estimates as its advertising and cloud computing units impressed. U.S. gross domestic product (GDP) increased 1.1% on annual basis in the first quarter, well below the 2% estimate. In other economic news, jobless claims totaled 230,000 for the week ended April 22, a decline of 16,000 and below the estimate for 249,000.
Value-oriented pockets of the markets outperformed yesterday with S&P 500 Value (SPYV) increasing 2.24% and outpacing other U.S. factor strategies. All factors finished up on the day and S&P 500 Growth (SPYG) also rose 1.72%. Emerging Markets (EEM) added 1.35% as Brazil (EWZ, +2.08%), Indonesia (EIDO, +1.85%), and China (MCHI, +1.35%) posted strong returns. Developed ex-U.S. Markets (EFA, +1.22%) were lifted by Japan (EWJ, +1.68%) and the Netherlands (EWN, +1.61%). EFA sits from 52-week highs.
Sectors: All U.S. sectors posted negative returns on Tuesday with Materials (XLB) and Technology (XLK) each dropping more than 2%. Consumer Discretionary (XLY, -1.98%), Energy (XLE, -1.88%), Industrials (XLI, -1.83%), and Financials (XLF, -1.72%) were also weak. Communication Services (XLC) dipped 1.56% while Health Care (XLV) and Real Estate (XLRE) were both down around 1%. Utilities (XLU) and Consumer Staples (XLP) were the top performing sectors, decreasing just 9 bps and 13 bps, respectively. On the industry level,
Themes: Global themes were battered on Tuesday as all thematic segments finished lower and most segments declined more than 2%.
Commodities & Yields: The U.S. Dollar (UUP) inched higher by 4 bps, U.S. Aggregate Bonds (AGG) sunk 36 bps, and 20+ Year Treasury Bonds (TLT) declined 99 bps yesterday. At Thursday’s close, the U.S. 2-Year Treasury Yield stood at 4.080% and the U.S. 10-Year Treasury Yield stood at 3.524%. Broad Commodities (DJP) dipped 19 bps
Daily Note
4.27.2023
Equities: The NASDAQ 100 (QQQ) added 58 bps on Wednesday, outpacing other major averages. QQQ was lifted by its largest holding, Microsoft (13.22% weight), which surged 7.24% on the day after strong earnings results. The Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) declined 71 bps and 42 bps, respectively. Small-Caps (IJR, -93 bps) and Mid-Caps (IJH, -90 bps) were also weak. Chipotle soared nearly 13% yesterday and hit all time highs after reporting quarterly earnings and revenue that topped expectations late in Tuesday's session. After the closing bell, Meta reported an unexpected increase in sales for the first quarter and issued better-than-expected guidance for the current period. On the economic front, demand for long-lasting goods such as appliances, computers and transportation equipment increased far more than expected in March, indicating a resilient U.S. economy. On Thursday, investors will be looking towards earnings results from Amazon after the bell and jobless claims figures.
All U.S. factor strategies were in the red except for S&P 500 Low Volaility (SPLV), which inched higher by 2 bps. S&P 500 High Beta (SPHB, -3.16%) and S&P 500 Pure Growth (RPG, -2.03%) were hit the hardest while S&P 500 Pure Value (RPV) also dropped 1.97% on the day. Emerging Markets (EEM, -1.88%) were once again pulled lower by China (MCHI, -2.62%). Taiwan (EWT) was also down 2.54%. Developed ex-U.S. Markets (EFA) fell 1.40% as the Netherlands (EWN) declined 2.85%, South Korea (EWY) decreased 2.83%, and Australia (EWA) sunk 1.80%.
Sectors: All U.S. sectors posted negative returns on Tuesday with Materials (XLB) and Technology (XLK) each dropping more than 2%. Consumer Discretionary (XLY, -1.98%), Energy (XLE, -1.88%), Industrials (XLI, -1.83%), and Financials (XLF, -1.72%) were also weak. Communication Services (XLC) dipped 1.56% while Health Care (XLV) and Real Estate (XLRE) were both down around 1%. Utilities (XLU) and Consumer Staples (XLP) were the top performing sectors, decreasing just 9 bps and 13 bps, respectively. On the industry level,
Themes: Global themes were battered on Tuesday as all thematic segments finished lower and most segments declined more than 2%.
Commodities & Yields: At yesterday’s closing bell, the U.S. 2-Year Treasury Yield stood at 3.932% and the U.S. 10-Year Treasury Yield stood at 3.441%. The U.S. Dollar (UUP) dipped 32 bps,
Global Thematic Playbook
4.27.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
4.26.2023
Equities: U.S. markets finished lower on Tuesday as investors weighed the latest corporate earnings results and monitored sinking treasury yields. The NASDAQ 100 (QQQ) declined 1.89%, the S&P 500 (SPY) fell 1.59%, and the Dow Jones Industrial Average (DIA) dropped 1.01%. Small-Caps lagged as the Russell 2000 (IWM) plunged 2.47%. Treasury yields were sharply lower yesterday with the U.S. 2-Year dropping below 3.95% and the U.S. 10-Year decreasing below 3.40%. On the earnings front, General Motors, PepsiCo, and McDonald’s all reported stronger-than-expected results while United Parcel Services (UPS) missed analyst expectations for earnings and revenue. UPS finished down nearly 10% yesterday following the disappointing results. Chipotle also topped estimates on the top and bottom lines. After the closing bell, Alphabet reported first-quarter revenue that exceeded analysts’ estimates and announced a $70 billion share buyback program. Microsoft issued better-than-expected earnings and revenue results amid strong cloud growth. First Republic plummeted more than 49% on Tuesday following its earnings report on Monday which showed that deposits shrank by 40.8% in the quarter. On the economic front, new home sales posted a surprise increase as interest rates remain elevated and the Conference Board’s Consumer Confidence Index fell to 101.3 for April, down from 104 in March.
All U.S. factor strategies were in the red except for S&P 500 Low Volaility (SPLV), which inched higher by 2 bps. S&P 500 High Beta (SPHB, -3.16%) and S&P 500 Pure Growth (RPG, -2.03%) were hit the hardest while S&P 500 Pure Value (RPV) also dropped 1.97% on the day. Emerging Markets (EEM, -1.88%) were once again pulled lower by China (MCHI, -2.62%). Taiwan (EWT) was also down 2.54%. Developed ex-U.S. Markets (EFA) fell 1.40% as the Netherlands (EWN) declined 2.85%, South Korea (EWY) decreased 2.83%, and Australia (EWA) sunk 1.80%.
Sectors: All U.S. sectors posted negative returns on Tuesday with Materials (XLB) and Technology (XLK) each dropping more than 2%. Consumer Discretionary (XLY, -1.98%), Energy (XLE, -1.88%), Industrials (XLI, -1.83%), and Financials (XLF, -1.72%) were also weak. Communication Services (XLC) dipped 1.56% while Health Care (XLV) and Real Estate (XLRE) were both down around 1%. Utilities (XLU) and Consumer Staples (XLP) were the top performing sectors, decreasing just 9 bps and 13 bps, respectively. On the industry level,
Themes: Global themes were battered on Tuesday as all thematic segments finished lower and most segments declined more than 2%.
Commodities & Yields: Broad Commodities (DJP) sunk 1.18% yesterday with Energy (DBE) and Industrial Metals (DBB) both falling more than 2%. At Tuesday’s closing bell, the U.S. 2-Year Treasury Yield stood at 3.927% and the U.S. 10-Year Treasury Yield stood at 3.392%. The U.S. Dollar (UUP) rose 47 bps, U.S. Aggregate Bonds (AGG) added 62 bps, and 20+ Year Treasury Bonds (TLT) jumped 1.47%.
U.S. Factor Playbook
4.25.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
4.25.2023
Equities: Ahead of this week’s big tech earnings reports, the NASDAQ 100 (QQQ) sunk 21 bps while Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) rose 19 bps and 10 bps, respectively, on Monday. Year-to-date, QQQ is still up nearly 19% and is outperforming SPY by more than 10% and DIA by around 16%. Coca-Cola reported quarterly earnings and revenue yesterday that topped analysts’ expectations, amid price hikes and higher demand for its beverages. Google parent company Alphabet and Microsoft are scheduled to release results on Tuesday along with Visa, PepsiCo, and McDonald’s. Disney announced on Monday that its second round of layoffs, which will total about 4,000 jobs, had begun. The company plans to reduce its workforce by 7,000 jobs as part of a larger reorganization that will see the company cut $5.5 billion in costs. According to data from the Chicago Fed National Activity Index released on Monday, economic conditions for the Chicago region plunged in April. The Chicago Fed Survey of Economic Conditions tumbled to -37 for the month, down from -8 in March, “suggesting that economic growth was well below trend,” the central bank report stated.
Growth-oriented pockets of the markets underperformed yesterday with S&P 500 Pure Growth (RPG) declining 1.07%. S&P 500 Momentum (SPMO) was the top performing U.S. factor strategy on the day, adding 69 bps, while S&P 500 Value (SPYV) was flat. Emerging Markets (EEM) fell 23 bps with China (MCHI) dropping another 1.27%. Over the past 3 months, MCHI is down 14.26%. Developed ex-U.S. Markets (EFA) climbed 26 bps as Switzerland (EWL, +77 bps) and France (EWQ, +58 bps) posted solid returns once again.
Sectors: Energy (XLE) jumped 1.53% on Monday, handily outpacing other U.S. sectors. XLE received a boost from Oil & Gas Equipment & Services (XES, +3.49%) and Oil & Gas Exploration & Production (XOP, +1.84%). Materials (XLB), Health Care (XLV), and Utilities (XLU) all added at least 50 bps while Consumer Staples (XLP) gained 40 bps. Technology (XLK) decreased 44 bps, Real Estate (XLRE) dropped 27 bps, and Financials (XLF) declined 24 bps. Communication Services (XLC) and Consumer Discretionary (XLY) saw modest losses on the day.
Themes: Most global thematic segments finished lower yesterday with Biotech (SBIO, -1.74%), Cloud Computing (SKYY, -1.36%), and Evolving Consumer (SOCL, -1.16%) falling the furthest. Online Retail (IBUY) and Cyber Security (HACK) were both down more than 90 bps and FinTech (FINX) dropped 77 bps.
Commodities & Yields: U.S. Aggregate Bonds (AGG) increased 39 bps, 20+ Year Treasury Bonds (TLT) rose 97 bps, and the U.S. Dollar (UUP) dipped 32 bps. At Monday’s close, the U.S. 2-Year Treasury Yield stood at 4.141% and the U.S. 10-Year Treasury Yield stood at 3.509%. Broad Commodities (DJP) advanced 37 bps with Energy (DBE) climbing 1.57%.
Daily Note
4.24.2023
Equities: On Friday, U.S. markets posted modest gains as the NASDAQ 100 (QQQ) and the Dow Jones Industrial Average (DIA) both added 10 bps while the S&P 500 (SPY) rose 8 bps. All three major averages were down last week with QQQ declining 62 bps, DIA falling 16 bps, and SPY dipping 6 bps. Procter & Gamble climbed 3.50% on Friday after reporting stronger-than-expected quarterly earnings results and lifiting its sales forecast. Lyft also announced another round of layoffs with about 1,200 jobs to be slashed. This week, investors will be looking towards Consumer Confidence data, New Home Sales, Durable Goods Orders, and Personal Consumption Expenditures (PCE) results along with more corportate earnings. Amzon, Alphabet, Meta Platforms, and Microsoft are all slated to report, amongst other companies.
S&P 500 Pure Growth (RPG) sunk 44 bps on Friday and lagged other U.S. factor strategies. S&P 500 Minimum Variance (SPMV, +26 bps), and S&P 500 Value (SPYV, +20 bps) saw the best returns for the day. Most factors were in the red last week. S&P 500 Enhanced Value (SPVU) and RPG both dropped more than 1%. S&P 500 Low Volatility (SPLV) was up 90 bps for the week. Developed ex-U.S. Markets (EFA) increased 51 bps on Friday as Switzerland (EWL) jumped 1.03% and France (EWQ) rose 94 bps. EFA, EWL, and EWQ are all trading at 52-week highs. China (MCHI) decreased 1.60% on the day, pulling Emerging Markets (EEM, -94 bps) lower. Last week, EEM fell 1.79% and EFA added 56 bps.
Sectors: U.S. sectors were mixed on Friday with Consumer Discretionary (XLY, +1.10%) outperforming. Consumer Staples (XLP) and Health Care (XLV) both gained around 70 bps while Utilities (XLU) and Communication Services (XLC) both added around 25 bps. XLV was lifted by Health Care Services (XHS, +2.36%) and Biotech (XBI, +2.05%). XLP entered overbought territory and is trading within 1% of 52-week highs. Materials (XLB) declined 88 bps on Friday, dragged lower by Metals & Mining (XME, -2.58%). Energy (XLE) was also down 58 bps. Last week, XLC and XLE were the worst performing sectors, dropping 2.60% and 2.58%, respectively. Meanwhile, XLP, Real Estate (XLRE), XLU, and Financials (XLF) all gained more than 1%.
Themes: Genomics (ARKG, +2.10%) and Biotech (SBIO, +2.07%) led other global thematic segments on Friday. Casinos & Gaming (BETZ) and 3D Printing (PRNT) both climbed more than 1% while Space (UFO) and Wind (FAN) both gained at least 70 bps. Blockchain (BLOK) dropped 1.58% and Advanced Materials (REMX) declined 1.55%. Last week, Biotech (SBIO) surged 10.23% and handily outpaced other thematic segments. Casinos & Gaming (BETZ) also rose 4.07% on the week while Blockchain (BLOK) sunk 7.66%. BLOK is still up 27.65% year-to-date while SBIO is up just 13 bps.
Commodities & Yields: The U.S. Dollar (UUP) dipped 11 bps, U.S. Aggregate Bonds (AGG) dropped 17 bps, and 20+ Year Treasury Bonds (TLT) fell 56 bps on Friday. At Friday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.182% and the U.S. 10-Year Treasury Yield stood at 3.568%. Broad Commodities (DJP) declined 68 bps as WTI Crude Oil (USO) rose 90 bps, Gold (GLD) decreased 99 bps, and Nickel (JJN) sunk 1.47%.
U.S. Size & Style Playbook
4.24.2023
U.S. Sector & Industry Playbook
4.24.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
4.21.2023
Equities: U.S. markets finished lower yesterday with the NASDAQ 100 (QQQ) falling 76 bps, the S&P 500 (SPY) dropping 55 bps, and the Dow Jones Industrial Average (DIA) sinking 31 bps. All three major averages are on pace for a losing week as of Thursday’s close. Investors continued to mull mixed earnings results as AT&T and American Express both reported weaker-than-expected quarterly figures. Tesla also plunged nearly 10% yesterday on margin concerns, pulling technology names lower. Investor confidence was also shaken after Cleveland Federal Reserve President Loretta Mester stated that interest rates could have a little further to rise this year and stay for a while. Existing home sales decreased further than expected in March as elevated interest rates continue to impact purchases. Sales declined 2.4% from February, according to the National Association of Realtors. Weekly jobless claims were higher than expected while manufacturing activity in the Philadelphia region contracted more than expected.
S&P 500 Low Volatility (SPLV, +11 bps) and S&P 500 Pure Growth (RPG, +4 bps) were the only U.S. factor strategies in the green while S&P 500 Enhanced Value (SPVU), S&P 500 Dividend (SPYD), S&P 500 Pure Value (RPV), and S&P 500 High Beta (SPHB) all sunk more than 1%. Developed ex-U.S. Markets (EFA) were flat and Emerging Markets (EEM) dipped 15 bps. China (MCHI) declined 77 bps yesterday, pulling EEM lower.
Sectors: All U.S. sectors were in negative territory on Thursday except for Consumer Staples (XLP), which gained 24 bps. Consumer Discretionary (XLY, -1.54%), Real Estate (XLRE, -1.20%), and Communication Services (XLC, -1.03%) were the worst performing sectors. XLRE is now trading below its 50-day and 200-day moving averages. Energy (XLE) dropped 88 bps and Technology (XLK) declined 66 bps. Homebuilders (XHB) added 72 bps and was the only industry to increase on Thursday. Biotech (XBI) lagged, falling 2.10%, while Regional Banks (KRE), Oil & Gas Equipment & Services (XES), Internet (XWEB), and Banks (KBE) all declined more than 1.65%.
Themes: Water (PHO) was the lone global thematic segment to see positive returns yesterday, adding just 15 bps. Most segments were down more than 1% while Multi-Theme (ARKK), Advanced Materials (REMX), and Cannabis (MJ) all dropped more than 3%. MJ hit new 52-week lows and entered oversold territory once again. Disruptive Tech (ARKW, -2.94%), Genomics (ARKG, -2.92%), Blockchain (BLOK, -2.87%), and NextGen Transportation (DRIV, -2.39%) were also weak. Clean Energy (PBW) dipped 1.54% on the day and sits just 50 bps above 52-week lows. PBW has fallen nearly 16% over the the past three months.
Commodities & Yields: At Thursday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.151% and the U.S. 10-Year Treasury Yield stood at 3.538%. U.S. Aggregate Bonds (AGG) added 46 bps, 20+ Year Treasury Bonds (TLT) rose 85 bps, and the U.S. Dollar (UUP) was flat. Broad Commodities (DJP) declined 1.05% as Energy (DBE) fell another 2.13%. WTI Crude Oil (USO) and Gasoline (UGA) dropped 2.45% and 1.87%, respectively.
Daily Note
4.20.2023
Equities: U.S. markets dipped on Wednesday as investors evaluated the latest batch of earnings results and newly released economic data. The Dow Jones Industrial Average (DIA) fell 24 bps while the NASDAQ 100 (QQQ) and the S&P 500 (SPY) slipped 5 bps and 2 bps, respectively. Small-Caps (IJR, +30 bps) and Mid-Caps (IJH, +19 bps) posted modest gains. On the earnings front, Morgan Stanley beat analyst expectations on the top and bottom lines while Abbott Laboratories topped earnings expectations and reaffirmed future guidance. After the closing bell, Tesla reported earnings and revenue results that were relatively in line with estimates. Net income declined 24% year-over-year. IBM’s earnings topped estimates while revenue missed. According to the Mortgage Bankers Association seasonally adjusted index, mortgage applications plunged 10% from the previous week last week as mortgage rates increased. Buyer demand was 36% lower from this time last year. Investors will be looking towards more earnings results along with Thursday’s Philadelphia Fed Manufacturing Index results, Existing Home Sales data, and Jobless Claims figures.
Most U.S. factor strategies finished in negative territory yesterday with S&P 500 Pure Growth (RPG, -70 bps) and S&P 500 Enhanced Value (SPVU, -64 bps) falling the furthest. S&P 500 Dividend (SPYD, +29 bps) and S&P 500 Low Volatility (SPLV, +20 bps) were the top performing factors. Developed ex-U.S. Markets (EFA) declined 31 bps as Hong Kong (EWH) dropped 1.05% and South Korea (EWY) decreased 97 bps. Brazil (EWZ) plunged 4.27% on the day, dragging Emerging Markets (EEM, -1.00%) lower. Taiwan (EWT) and China (MCHI) both fell more than 1% as well.
Sectors: Utilities (XLU, +77 bps), Real Estate (XLRE, +59 bps), Health Care (XLV, +31 bps), and Financials (XLF, +24 bps) were the only U.S. sectors to post gains on Wednesday. XLF was lifted by solid returns from Regional Banks (KRE, +3.94%) and Banks (KBE, +3.07%). XLF is the only sector still trading below relative 50-day and 200-day moving averages. Communication Services (XLC) was down 75 bps yesterday, underperforming other sectors. Energy (XLE), Technology (XLK), and Materials (XLB) all declined around 30 bps. Telecom (XTL) dropped 1.92% and is approaching oversold territory. Metals & Mining (XME), Semiconductors (XSD), and Oil & Gas Exploration & Production (XOP) all sunk more than 1%.
Themes: Most global thematic segments finished lower yesterday with Blockchain (BLOK) falling 2.93%. Cyber Security (HACK), Clean Energy (PBW), Disruptive Tech (ARKW), Evolving Consumer (SOCL), NextGen Transportation (DRIV), and Connectivity (FIVG) all slumped more than 1%. PBW now sits 2.07% from 52-week lows. FinTech (FINX), Cloud Computing (SKYY), Big Data (AIQ), and Advanced Materials (REMX) were all down more than 80 bps. Genomics (ARKG) climbed 1.21% and outpaced other segments. Biotech (SBIO, +72 bps), Digital Infrastructure (SRVR, +50 bps), and Wind (FAN, +22 bps) also saw positive returns.
Commodities & Yields: Broad Commodities (DJP) declined 1.41% as Natural Gas (UNG) fell 4.90%, Gasoline (UGA) dropped 3.23%, and WTI Crude Oil (USO) decreased 2.02%. The U.S. Dollar (UUP) added 22 bps, U.S. Aggregate Bonds (AGG) dipped 15 bps, and High Yield Corporate Bonds (HYG) sunk 40 bps. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 4.261% and the U.S. 10-Year Treasury Yield stood at 3.597%.
Daily Note
4.19.2023
Equities: On a busy earnings day, U.S. markets were relatively flat yesterday with the S&P 500 (SPY) adding 7 bps, the NASDAQ 100 (QQQ) inching higher by 1 bps, and the Dow Jones Industrial Average (DIA) dipping 3 bps. Bank of America reported Q1 earnings and revenue that topped expectations on the back of higher interest rates. Bank of America CEO Brian Moynihan also said Tuesday that he sees only a slight recession hitting the U.S. as consumption figures remain solid. Goldman Sachs posted revenue results that missed analyst estimates after taking a $470 million hit tied to the sale of consumer loans. Lockheed Martin beat expectations for the first quarter and reaffirmed its full-year guidance. Johnson & Johnson reported adjusted earnings and revenue that beat expectations, and raised its full-year guidance, citing strength in units including pharmaceuticals. After the close, United Airlines reported a quarterly loss but forecasted a profit for the 2nd quarter amid rising travel demand. Netflix beat on earnings but missed on revenue. Separately, Atlanta Federal Reserve President Raphael Bostic said Tuesday he envisions the central bank approving one more interest rate increase before pausing to see how policy tightening is impacting the economy.
U.S. factor strategies were mixed as S&P 500 Enhanced Value (SPVU, +31 bps) and S&P 500 High Beta (SPHB, +26 bps) outperformed. S&P 500 Low Volatility (SPLV) was the worst performing factor, dropping 20 bps. Emerging Markets (EEM) sunk 13 bps with Mexico (EWW) declining 1.01% and South Africa (EZA) climbing 1.19%. Developed ex-U.S. Markets (EFA, +55 bps) were lifted by the Netherlands (EWN, +90 bps) and France (EWQ, +82 bps).
Sectors: Health Care (XLV, -68 bps), Utilities (XLU, -52 bps), and Communication Services (XLC, -51 bps) lagged other U.S. sectors yesterday. Real Estate (XLRE) fell 16 bps and was the only other sector to post losses. Industrials (XLI) and Materials (XLB) were the best performing sectors, rising 48 bps and 42 bps, respectively. Energy (XLE), Technology (XLK), Consumer Staples (XLP), and Financials (XLF) all gained at least 30 bps. XLK is trading just 1.26% from 52-week highs while XLI and XLP are sit within 3% of 52-week highs. On the industry level, Homebuilders (XHB) jumped 1.74% and Regional Banks (KRE) sunk 2.16%. KRE is down 26.82% in 2023 while XHB has surged 14.64%.
Themes: Global thematic segments were split on Tuesday. Casinos & Gaming (ESPO) increased 2.21% followed by Blockchain (BLOK, +1.02%), Biotech (SBIO, +94 bps), and eSports & Video Games (ESPO, +81 bps). BLOK and BETZ are both approaching overbought territory. No other segments gained more than 75 bps on the day. Smart Infrastructure (GRID) added 40 bps and hit 52-week highs. Cannabis (MJ) posted the worst returns, declining 2.06%. Clean Energy (PBW) also fell 1.83% while Genomics (ARKG), Space (UFO), and Industrial Revolution (ARKQ) all dipped more than 70 bps. The ARK Innovation ETF (ARKK) leads other thematic ETFs in net inflows over the last week, gathering $127 million.
Commodities & Yields: The U.S. Dollar (UUP) declined 36 bps, U.S. Aggregate Bonds (AGG) added 14 bps, and 20+ Year Treasury Bonds (TLT) gained 36 bps. At Tuesday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.216% and the U.S. 10-Year Treasury Yield stood at 3.579%. Broad Commodities (DJP) rose 55 bps on strength from Industrial Metals (DBB, +1.11%). Nickel (JJN) and Aluminum (JJU) were both up more than 2% and Natural Gas (UNG) rose 3.09%.
Global Thematic Playbook
4.19.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Factor Playbook
4.18.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
4.18.2023
Equities: U.S. markets posted modest gains on Monday as investors digested the latest corporate earnings results. The S&P 500 (SPY) added 36 bps, the Dow Jones Industrial Average (DIA) rose 32 bps, and the NASDAQ 100 (QQQ) inched higher by 8 bps. Small-Caps outperformed with the Russell 2000 (IWM) climbing 1.29%. State Street dropped more than 10% yesterday after missing analyst expectations on the top and bottom lines. Charles Schwab beat profit estimates but saw a 30% decline in deposits from the previous year. Schwab's revenue also increased 10% year-over-year. Bank of America, Morgan Stanley, Goldman Sachs, Tesla, and IBM are all scheduled to report quarterly results this week.
S&P 500 Dividend (SPYD) and S&P 500 Pure Value (RPV) both jumped more than 1% on the day while S&P 500 Momentum (SPMO -23 bps) and S&P 500 Pure Growth (RPG, -17 bps) lagged. All U.S. factor strategies are up more than 5% in the last month except for S&P 500 High Beta (SPHB), which has risen 3.65%. Developed ex-U.S. Markets (EFA) declined 18 bps as the Netherlands (EWN) fell 1.06% and South Korea (EWY) sunk 82 bps. Emerging Markets (EEM, +43 bps) received a boost from China (MCHI) which surged 2.09%. MCHI has gained almost 5% year-to-date.
Sectors: Real Estate (XLRE) advanced 2.27% yesterday and handily outpaced other U.S. sectors. Financials (XLF) also rose 1.16% while Industrials (XLI) and Utilities (XLU) gained 79 bps and 71 bps, respectively. XLRE and XLF are the only sectors still trading below relative 50-day and 200-day moving averages. XLF was bolstered by Banks (KBE, +2.27%) and Regional Banks (KRE, +2.27%). Utilities (XLU), Materials (XLB), and Consumer Staples (XLP) all added more than 50 bps. Energy (XLE) was the worst performing sector, declining 1.18%. Communication Services (XLC, -57 bps) and Health Care (XLV) were the only other sectors to finish lower. Biotech (XBI) posted the best returns amongst other industries, jumping 4.66%.
Themes: AMost global thematic segments saw positive returns on Monday led by Biotech (SBIO), which rocketed 7.44%. SBIO is approaching overbought territory but is still down nearly 3% year-to-date. Cannabis (MJ) and Solar (TAN) both gained more than 2.50% while Clean Energy (PBW), Digital Infrastructure (SRVR), Genomics (ARKG), and Space (UFO) all increased more than 1%. TAN is still trading within 5.32% of 52-week lows. Blockchain (BLOK) lagged, dropping 1.48%. The KraneShares CSI China Internet ETF (MCHI) was strong yesterday, climbing nearly 3%. KWEB has seen $658 million in net outflows over the past 3 months.
Commodities & Yields: U.S. Aggregate Bonds (AGG) dropped 50 bps, 20+ Year Treasury Bonds (TLT) fell 1.19%, and the U.S. Dollar (UUP) rose 51 bps. At Monday's close, the U.S. 2-Year Treasury Yield stood at 4.188% and the U.S. 10-Year Treasury Yield stood at 3.598%. Broad Commodities added 12 bps with Natural Gas (UNG) jumping 6.58%, WTI Crude Oil (USO) declining 1.73%, and Lead (LD) decreasing 2.56%.