All Research Archives
Daily Note
11.30.2023
Equities: Ahead of Thursday’s Personal Consumption Expenditures (PCE) report, U.S. equity markets were relatively flat yesterday with the Dow Jones Industrial Average (DIA) adding 15 bps, the NASDAQ 100 (QQQ) slipping 10 bps, and the S&P 500 (SPY) dipping 7 bps. DIA remains in overbought territory. According to updated U.S. Gross Domestic Product (GDP) figures for Q3, the U.S. economy grew at an even stronger pace than previously indicated on the heels of strong government spending and better-than-expected investment, particularly in nonresidential fixed investment. GDP accelerated at a 5.2% annualized pace, which was above the initial 4.9% reading and the 5.0% estimate. Consumer spending saw a downward revision, rising just 3.6%, compared with +4% in the initial estimate. The Federal Reserve reported Wednesday in its periodic “Beige Book” summary that economic activity has slowed broadly in the last six weeks and consumers showed more “price sensitivity”. Separately, Richmond Federal Reserve President Thomas Barkin said Wednesday that policymakers need to keep the option of raising interest rates if inflation doesn’t show enough progress coming down. Atlanta Fed President Raphael Bostic also said in an essay that he sees economic growth slowing substantially and believes inflation will come down further as well. Bostic said his staff expects the inflation rate to decline to 2.5% by the end of 2024 and then get back to the Fed’s 2% target by the end of 2025. The U.S. 10-Year Treasury Yield also fell below 4.3% intraday for the first time since September, lifting investor sentiment. General Motors jumped more than 9% yesterday after announcing a $10 billion stock buyback program and an increase of its dividend.
S&P 500 High Beta (SPHB) and S&P 500 Pure Value (RPV) led other U.S. factor strategies on Wednesday, rising 1.19% and 1.08%, respectively. Factors were split with S&P 500 Dividend (SPYD) also gaining 86 bps and S&P 500 Low Volatility (SPLV, -44 bps) and S&P 500 Quality (SPHQ, -33 bps) underperforming. Emerging Markets (EEM) sunk 58 bps on the day as China (MCHI) declined 1.92%. Thailand (THD) and South Africa (EZA) were also down more than 1%. Developed ex-U.S. Markets (EFA) advanced 21 bps after Germany (EWG) increased 1.03%, Switzerland (EWL) climbed 94 bps, and Hong Kong (EWH) decreased 1.91%. EWG has climbed more than 15% over the past month and sits in overbought territory.
Sectors: Mixed session for U.S. Sectors yesterday as Consumer Staples (XLP) dropped 81 bps and Real Estate (XLRE) added another 76 bps. Utilities (XLU), Energy (XLE), and Communication Services (XLC) all declined more than 70 bps. Consumer Discretionary (XLY) also fell 27 bps. Financials (XLF, +71 bps), Materials (XLB, +52 bps), and Industrials (XLI, +38 bps) saw solid returns while Technology (XLK) and Health Care (XLV) added less than 10 bps. XLF was bolstered by Regional Banks (KRE) and Banks (KBE), which both jumped more than 2%. XLK received a boost from Software & Services (XSW, +1.49%) and Semiconductors (XSD, +1.45%). XLK is trading just 30 bps from 52-week highs.
Themes: Just 3 global thematic segments were in the red on Wednesday: Casinos & Gaming (BETZ, -63 bps), Evolving Consumer (SOCL, -41 bps), and Cannabis (MJ, -32 bps). Clean Energy (PBW) outgained other segments, advancing 3.25%. Cloud Computing (SKYY) rose 2.02% while Cyber Security (HACK) and 3D Printing (PRNT) each gained more than 1.60%. Cloud Computing (SKYY) and Cyber Security (HACK) hit fresh 52-week highs, as did Disruptive Tech (ARKW, +78 bps) and Online Retail (IBUY, +14 bps). Space (UFO), Biotech (SBIO), Solar (TAN), Connectivity (FIVG), Digital Infrastructure (SRVR), Robotics & AI (ROBO), and Blockchain (BLOK) all gained more than 1% yesterday.
Commodities & Yields: The U.S. Dollar (UUP) was up 10 bps, U.S. Aggregate Bonds (AGG) increased 49 bps, and 20+ Year Treasury Bonds (TLT) climbed 1.26% yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.648% and the U.S. 10-Year Treasury Yield stood at 4.271%. Broad Commodities (DJP) added 51 bps on strength from WTI Crude Oil (USO, +1.77%), Gasoline (UGA, +2.37%), and Wheat (WEAT, +2.17%). Industrial Metals (DBB) slipped 74 bps on the day.
Global Thematic Playbook
11.29.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.29.2023
Equities: U.S. markets were moderately higher on Tuesday as investors digested fresh rhetoric from Federal Reserve officials, Consumer Confidence data for November, and more earnings results. The NASDAQ 100 (QQQ) added 26 bps, the Dow Jones Industrial Average (DIA) increased 22 bps, and the S&P 500 (SPY) rose 10 bps. Mid-Caps (IJH) and Small-Caps (IJR) underperformed, sinking 64 bps and 52 bps, respectively. Fed Governor Christopher Waller expressed confidence Tuesday that policy is “currently well positioned” to slow the economy and bring inflation back to 2%. Waller added that he could see a point where the Fed might start lowering rates if inflation continues to ease over the next three to five months. Governor Michelle Bowman offered a contrasting view, in which she reiterated her belief that more rate hikes likely will be needed as evolving dynamics keep inflation elevated. The next Federal Open Market Committee (FOMC) meeting is scheduled for December 12-13. Jerome Powell is also slated to speak on Friday. The Conference Board Consumer Confidence Index rose to 102 in November up from a downwardly revised 99.1 and ahead of the 101 estimate. The expectations index came in at just 77.8 which indicates that consumer expect a recession. Chip maker Micron Technology declined nearly 2% yesterday despite beating revenue estimates and lifting forward guidance. After the closing bell, cyber security firm CrowdStrike reported that total revenue increased 35% year-over-year in Q3 to $786 million and reached a milestone with over $3 billion in Annual Recurring Revenue (ARR).
U.S. factor strategies were mixed yesterday as S&P 500 High Dividend (SPYD) climbed 42 bps, S&P 500 High Beta (SPHB) gained 24 bps, and S&P 500 Pure Growth (RPG) fell 39 bps. S&P 500 Momentum (SPMO) also dropped 25 bps. S&P 500 Value (SPYV), which added 11 bps on the day, is the only factor in overbought territory. Developed ex-U.S. Markets (EFA) inched higher by 3 bps as South Korea (EWY) and Australia (EWA) advanced more than 1% and Hong Kong (EWH) declined 63 bps. Emerging Markets (EEM, +84 bps) were bolstered by Thailand (THD, +1.75%), Taiwan (EWT, +1.35%), South Africa (EZA, +1.18%), and Brazil (EWZ, +1.10%). China (MCHI) lagged, rising just 28 bps.
Sectors: All U.S. sectors were in positive territory on Tuesday, except for Health Care (XLV, -51 bps), Industrials (XLI, -24 bps), and Financials (XLF, -3 bps). XLV was pulled lower by Health Care Equipment (XHE, -1.40%) and Pharmaceuticals (XPH, -68 bps) while XLF was impacted by losses from Insurance (KIE, -1.43%). Consumer Discretionary (XLY) outpaced other sectors, rising 58 bps. Real Estate (XLRE, +55 bps), Consumer Staples (XLP, +46 bps), and Utilities (XLU, +32 bps) also posted solid returns on the day. Communication Services (XLC), Materials (XLB), and Technology (XLK) all increased around 20 bps. XLK and XLF are the only sectors in overbought territory. Retail (XRT) and Internet (XWEB) were the best performing industries on the day, both advancing around 90 bps.
Themes: Most global thematic segments posted gains on Tuesday led by Blockchain (BLOK), which surged 3.53%. Disruptive Tech (ARKW) and Multi-Theme (ARKK) were also strong, climbing 2.98% and 2.75%, respectively. Over the past month, Blockchain (BLOK) has risen more than 19% while Disruptive Tech (ARKW) and Multi-Theme (ARKK) have rocketed around 35%. FinTech (FINX) also advanced 1.88% yesterday while Digital Payments (IPAY), Solar (TAN), and Online Retail (IBUY) all increased around 1.50%. Advanced Materials (REMX) was up 1.26% and Clean Energy (PBW) and Industrial Revolution (ARKQ) both added 90 bps. Water (PHO) trailed other segments, sinking 85 bps, followed by 3D Printing (PRNT, -58 bps) and Casinos & Gaming (BETZ, -30 bps).
Commodities & Yields: U.S. Aggregate Bonds (AGG) gained 44 bps, 20+ Year Treasury Bonds (TLT) added 20 bps, and the U.S. Dollar (UUP) slipped 34 bps yesterday. At Tuesday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.736% and the U.S. 10-Year Treasury Yield stood at 4.336%. Broad Commodities (DJP) jumped 1.06% as Energy (DBE), Precious Metals (DBP), and Agriculture (DBA) all climbed more than 1%. WTI Crude Oil (USO) and Gasoline (UGA) were both up more than 1.85%, Gold (GLD) advanced 1.33%, Copper (CPER) rose 1.14%, and Wheat (WEAT) increased 2.03%.
U.S. Factor Playbook
11.28.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.28.2023
Equities: U.S. equity markets saw modest losses on Monday following another strong week last week. The S&P 500 (SPY) fell 18 bps, the Dow Jones Industrial Average (DIA) sank 14 bps, and the NASDAQ 100 (QQQ) slipped 9 bps. SPY and DIA remain in overbought territory and all three major averages are still trading well above relative 50-day and 200-day moving averages. All three major averages are also trading within 1% of 52-week highs. Investors weighed fresh new home sales data from the Commerce Department yesterday. Sales of new single-family homes dropped 5.6% month-over-month in October to a seasonally adjusted annual rate of 679K. The total was below estimates but was up 17.7% from the same period one year ago. The department also said the median sales price for a new home was $409,300, while the average was $487,000. Available inventory equated to 7.8 months of supply. The Consumer Confidence report is due on Tuesday followed by the release of the Beige Book on Wednesday, and Personal Consumption Expenditures (PCE) data on Thursday. Black Friday online spending reached a record $9.8 billion, up 7.5% from a year earlier, according to Adobe Analytics. Online sales on Cyber Weekend, the days between Black Friday and Cyber Monday, surged 7.7% to $10.3 billion. And Cyber Monday sales are expected to reach up to $12.4 billion, making it the biggest U.S. online shopping day of the year, according to Adobe. Several online retailers posted solid returns on Monday with Etsy rising nearly 3% and Wayfair climbing more than 7%. “Buy now, pay later” company Affirm jumped almost 12%, as shoppers flocked to usage of the flexible payment options for their Cyber Monday purchases.
All U.S. factor strategies finished lower yesterday, except for S&P 500 High Dividend Low Volatility (SPHD, +10 bps) and S&P 500 Dividend (SPYD, +6 bps). S&P 500 Quality (SPHQ), S&P 500 Pure Growth (RPG), and S&P 500 Momentum (SPMO) underperformed, all declining more than 25 bps. SPHQ has been the 2nd best performing factor year-to-date, climbing 19.60%. Emerging Markets (EEM) dropped 40 bps on Monday as China (MCHI) retreated 1.19% and Mexico (EWW) fell 80 bps. Developed ex-U.S. Markets (EFA, -34 bps) were impacted by losses from Hong Kong (EWH, -1.25%) and Australia (EWA, -85 bps).
Sectors: Just 3 U.S. sectors registered positive returns on Monday: Real Estate (XLRE, +36 bps), Utilities (XLU, +16 bps), and consumer Discretionary (XLY, +16 bps). Health Care (XLV) and Communication Services (XLC) were the worst performing sectors on the day, sinking 63 bps and 62 bps, respectively. Industrials (XLI) fell 56 bps while Energy (XLE) and Financials (XLF) both dropped around 35 bps. Consumer Staples (XLP) was also weak, dipping 28 bps. Technology (XLK, -1 bps) and XLF remain in overbought territory. Over the past month, XLRE, XLY, and XLF have all risen more than 12% while Technology (XLK) has climbed 14.45%. Metals & Mining (XME, +81 bps) and Insurance (KIE, +38 bps) were the only industries in the green on Monday while Oil & Gas Equipment & Services (XES, -99 bps) lagged.
Themes: Global thematic segments were split yesterday. Multi-Theme (ARKK, +1.27%) and Disruptive Tech (ARKW, +1.24%) outpaced other segments, followed by FinTech (FINX, +88 bps), Digital Infrastructure (SRVR, -68 bps), and Online Retail (IBUY, +44 bps). Clean Energy (PBW) slipped 3.32%, Advanced Materials (REMX) sank 2.82%, and Solar (TAN) declined 1.87%. PBW, REMX, and TAN are all trading more than 25% below relative 200-day moving averages. Casinos & Gaming (BETZ) and NextGen Transportation (DRIV) both fell more than 80 bps and Cannabis (MJ) dipped 65 bps. Water (PHO), ARKW, Big Data (AIQ), and Cyber Security (HACK) remain in overbought territory.
Commodities & Yields: At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.857% and the U.S. 10-Year Treasury Yield stood at 4.388%. U.S. Aggregate Bonds (AGG) increased 57 bps, 20+ Year Treasury Bonds (TLT) gained 1.67%, and the U.S. Dollar (UUP) fell 21 bps. Broad Commodities (DJP) dropped 58 bps as WTI Crude Oil (USO) sank 1.21%, Natural Gas (UNG) declined 1.86%, Silver (SLV) climbed 1.30%, Copper (CPER) slipped 83 bps, and Wheat (WEAT) decreased 2.34%.
Daily Note
11.27.2023
Equities: On a shortened trading session on Friday, U.S. equity markets were mixed with the Dow Jones Industrial Average (DIA) adding 35 bps, the S&P 500 (SPY) inching higher by 6 bps, and the NASDAQ 100 (QQQ) slipping 14 bps. All three major averages finished higher for the week last week as DIA climbed 1.25%, SPY gained 1.00%, and QQQ advanced 90 bps. Last week was the 4th consecutive positive week for all three major averages. Over the past month, QQQ has risen nearly 8.5% while SPY and DIA have increased 7.48% and 6.96%, respectively. This week, investors will be looking towards New Home Sales data, Consumer Confidence results, Gross Domestic Product (GDP) updates, the release of the Beige Book, Personal Consumption & Expenditures (PCE) figures, and ISM Manufacturing Index results. Investors will also be looking towards consumer spending trends stemming from Black Friday and Cyber Monday sales.
Growth-oriented pockets of the markets underperformed on Friday with S&P 500 Growth (SPYG) dipping 13 bps an S&P 500 Momentum (SPMO) slipping 10 bps. All other U.S. factor strategies were in the green. S&P 500 Pure Value (RPV, +51 bps) was the top performer. All factors were higher last week with most rising more than 50 bps. Developed ex-U.S. Markets (EFA, +76 bps) were lifted by the U.K. (EWU, +1.28%) and the Netherlands (EWN, +1.22%). Germany (EWG), France (EWQ), and Australia (EWA) were all up at least 90 bps as well while South Korea (EWY) sank 94 bps. Emerging Markets (EEM) added 5 bps as Thailand (THD) declined 1.37%, South Africa (EZA) climbed 1.85%, and Indonesia (EIDO) increased 1.55%. EFA advanced 99 bps last week and EEM increased 46 bps.
Sectors: Communication Services (XLC) and Technology (XLK) were the only U.S. sectors to see losses on Friday, falling 34 bps and 19 bps, respectively. Health Care (XLV) outperformed, rising 54 bps on strength from Biotech (XBI, +1.18%), Pharmaceuticals (XPH, +90 bps), and Health Care Equipment (XHE, +74 bps). Materials (XLB), Energy (XLE), Real Estate (XLRE), and Consumer Staples (XLP) were all up around 40 bps while Financials (XLF) advanced 31 bps. XLE received a boost from Oil & Gas Equipment & Services (XES), which gained 1.13%. XLK, XLF, and Industrials (XLI, +25 bps) all currently sit in overbought territory. Last week, all sectors were in positive territory with XLV rising 2.25%, XLP adding 1.32%, and XLC increasing 1.27%.
Themes: All global thematic segments posted gains on Friday, except for Solar (TAN, -1.26%), Cannabis (MJ, -96 bps), eSports & Video Games (ESPO, -50 bps), Evolving Consumer (SOCL, -48 bps), and Big Data (AIQ, -7 bps). Blockchain (BLOK) jumped 1.89% on the day and outpaced other segments. Biotech (SBIO), Genomics (ARKG), Disruptive Tech (ARKW), Multi-Theme (ARKK), FinTech (FINX), and Space (UFO) all advanced more than 1%. Industrial Revolution (ARKQ) and NextGen Transportation (DRIV) both added 92 bps on the day. Last week, most segments climbed more than 1% with Blockchain (BLOK) and Disruptive Tech (ARKW) climbing more than 3%. Advanced Materials (REMX) and Clean Energy (PBW) underperformed on the week both sinking around 1.20%.
Commodities & Yields: Broad Commodities (DJP, -76 bps) were pulled lower by Energy (DBE, -98 bps) and Agriculture (DBA, -1.50%) on Friday. WTI Crude Oil (USO), Natural Gas (UNG), and Gasoline (UGA) were all down more than 1% while Soybeans (SOYB) dropped 1.99% and Wheat (WEAT) fell 1.86%. Precious Metals (DBP) and Base Metals (DBB) rose 1.15% and 1.02%, respectively. The U.S. Dollar (UUP) declined 44 bps, U.S. Aggregate Bonds (AGG) sank 46 bps, and 20+ Year Treasury Bonds (TLT) slipped 1.18%. At the close, the U.S. 2-Year Treasury Yield stood at 4.959% and the U.S. 10-Year Treasury Yield stood at 4.484%.
U.S. Sector & Industry Playbook
11.27.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.24.2023
Equities: U.S. equity markets were higher on Wednesday ahead of the Thanksgiving holiday with the Dow Jones Industrial Average (DIA) rising 50 bps, the NASDAQ 100 (QQQ) gaining 41 bps, and the S&P 500 (SPY) adding 39 bps. DIA re-entered overbought territory, joining SPY. All three major averages are on pace to see positive returns on this shortened holiday week. The U.S. 10-Year Treasury Yield dropped early in the trading session on Wednesday, briefly falling to 4.369%, the lowest level since September 22. After reporting earnings and revenue results after the close on Tuesday, Nvidia was down around 2.5% on Wednesday following cautious forward guidance. Deere declined nearly 4% on the day after issuing disappointing guidance for fiscal 2024. The University of Michigan’s Consumer Sentiment Index rose slightly last month, indicating that consumers remain positive despite a slowdown. The index came in at 61.3 for November, eking out 60.6 forecast but still below an October reading of 63.8. Initial jobless claims for the week ended November 18 came in at 209K, down 24K from the previous week and 20K less than the consensus estimate.
S&P 500 Momentum (SPMO) was flat on Wednesday while all other U.S. factor strategies were in positive territory. S&P 500 Pure Value (RPV) and S&P 500 Low Volatility (SPLV) outperformed, each rising around 60 bps. S&P 500 Dividend (SPYD) added 36 bps on the day but is still down 14 bps week-to-date. Emerging Markets (EEM) sank 20 bps as Malaysia (EWM), Thailand (THD), and South Africa (EZA) all declined at least 1%. Developed ex-U.S. Markets (EFA) increased 24 bps, lifted by solid returns from Japan (EWJ, +63 bps).
Sectors: Energy (XLE) dipped 5 bps on Wednesday and was the only U.S. sector in the red. XLE was impacted by U.S. crude oil prices, which fell more than 4% on Wednesday after the Organization of Petroleum Exporting Countries delayed a meeting on production cuts scheduled for this weekend. Communication Services (XLC) and Consumer Staples (XLP) were the top performing sectors, climbing 82 bps and 72 bps, respectively. XLC hit fresh 52-week highs. Health Care (XLV) and Utilities (XLU) were both up 48 bps, Technology (XLK) rose 45 bps, and Financials (XLF) added 40 bps. XLV was bolstered by Health Care Equipment (XHS, +1.37%), Biotech (XBI, +1.11%), and Health Care Equipment (XHE, +1.02%).
Themes: All global thematic segments registered positive returns on Wednesday, except for Advanced Materials (REMX, -1.55%), Wind (FAN, -40 bps), and Biotech (SBIO, -17 bps). Genomics (ARKG) outgained other segments, climbing 1.66%. Evolving Consumer (SOCL, +1.53%) and Disruptive Tech (ARKW, +1.32%) were also strong. Blockchain (BLOK), Online Retail (IBUY), Casinos & Gaming (BETZ), FinTech (FINX), and Multi-Theme (ARKK) were all up more than 1%. Big Data (AIQ) and Water (PHO) are the only segments sitting in overbought territory and Cyber Security (HACK) is the only segment trading at 52-week highs.
Commodities & Yields: The U.S. Dollar (UUP) rose 34 bps, U.S. Aggregate Bonds (AGG) inched higher by 9 bps, and 20+ Year Treasury Bonds (TLT) increased 35 bps on Wednesday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.910% and the U.S. 10-Year Treasury Yield stood at 4.416%. Broad Commodities (DJP) sank 72 bps as all broad-based sectors posted losses. Energy (DBE) and Industrial Metals (DBB) both declined more than 1% while Precious Metals (DBP) fell 46 bps and Agriculture (DBA) decreased 50 bps.
Daily Note
11.22.2023
Equities: Following fresh earnings results and the release of the minutes for the October Fed meeting, U.S. equity markets finished lower on Tuesday to snap the latest winning streak. The NASDAQ 100 (QQQ) dropped 58 bps, the S&P 500 (SPY) declined 22 bps, and the Dow Jones Industrial Average (DIA) slipped 20 bps. QQQ and DIA exited overbought territory. Small-Caps underperformed once again with the Russell 2000 (IWM) sinking 1.29%. Best Buy reported mixed results yesterday and slashed its forward sales guidance. Lowe’s mixed revenue estimates as sales dropped almost 13% year-over-year for the quarter. The Home Improvement giant also slashed its full-year sales outlook. Dick’s Sporting Goods topped earnings and revenue estimates for the quarter and American Eagle plunged around 16% after issuing disappointing guidance. Abercrombie & Fitch gained more than 2% yesterday after beating expectations on the top and bottom lines. Sales surged 20% year-over-year and the company’s shares are up 223% year-to-date. After the close, Nvidia reported stronger-than-expected results as revenue grew 206% year-over-year. The minutes for the latest Federal Open Market Committee (FOMC) meeting showed that officials gave no indication of interest rate cuts and indicated that policy will need to remain “restrictive” amid concerns that inflation could be stubborn or tick higher. Separately, existing home sales came in below estimates for October at 3.79 million unites. It was the slowest sales pace since August 2010 and sales fell 14.6% year-over-year.
S&P 500 Low Volatility (SPLV) and S&P 500 Dividend Aristocrats (NOBL) were the only U.S. factor strategies in the green yesterday, adding 35 bps and 17 bps, respectively. S&P 500 High Beta (SPHB, -1.10%) and S&P 500 Pure Value (RPV, -73 bps) were the worst performing factors. S&P 500 Growth (SPYG) and S&P 500 Momentum (SPMO) remain in overbought territory. Developed ex-U.S. Markets (EFA) sank 39 bps as Hong Kong (EWH), the Netherlands (EWN), and South Korea (EWY) were all down around 1%. Emerging Markets (EEM, -63 bps) were dragged lower by South Africa (EZA, -1.75%), China (MCHI, -1.70%), and Indonesia (EIDO, -1.43%).
Sectors: Most U.S. sectors posted losses on Tuesday with Technology (XLK, -81 bps) falling the furthest. Semiconductors (XSD, -2.33%), Internet (XWEB, -1.24%), and Software & Services (XSW, -1.02%) pulled XLK lower. Real Estate (XLRE) declined 50 bps and Communication Services (XLC) sank 34 bps while Energy (XLE) and Consumer Discretionary (XLY) both dropped more than 20 bps. Health Care (XLV) outgained other sectors, rising 60 bps, despite weak returns from Biotech (XBI, -2.03%). Materials (XLB) added 39 bps, Consumer Staples (XLP) increased 30 bps, and Utilities (XLU) advanced 21 bps. XLK and XLF still sit in overbought territory.
Themes: Just 3 global thematic segments registered positive returns on Tuesday: Water (PHO, +38 bps), Cyber Security (HACK, +33 bps), and Cannabis (MJ, +32 bps). HACK hit fresh 52-week highs and is nearing overbought territory. Genomics (ARKG) and Clean Energy (PBW) underperformed, both decreasing more than 3%. Multi-Theme (ARKK) and Solar (TAN) were each down more than 2% while NextGen Transportation (DRIV) and Wind (FAN) both fell more than 1.80%. Biotech (SBIO), Disruptive Tech (ARKW), Blockchain (BLOK), Casinos & Gaming (BETZ), and Online Retail (IBUY) all slumped around 1.45% as well.
Commodities & Yields: U.S. Aggregate Bonds (AGG) rose 10 bps, 20+ Year Treasury Bonds (TLT) dipped 4 bps, and the U.S. Dollar (UUP) increased 10 bps yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.883% and the U.S. 10-Year Treasury Yield stood at 4.418%. Broad Commodities (DJP) added 35 bps on strength from Precious Metals (DBP, +1.13%). Gold (GLD) and Silver (SLV) were both up more than 1% on the day while Natural Gas (UNG) slipped 1.67% and Wheat (WEAT) advanced 1.45%.
U.S. Sector & Industry Playbook
11.21.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Factor Playbook
11.21.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.21.2023
Equities: Following a 3rd straight week of gains last week, U.S. equity markets registered positive returns once again on Monday. The tech-heavy NASDAQ 100 (QQQ) climbed 1.22%, the S&P 500 (SPY) rose 77 bps, and the Dow Jones Industrial Average (DIA) increased 60 bps. QQQ hit fresh 52-week highs and all three major averages currently sit in overbought territory. SPY is trading just 77 bps from 52-week highs and DIA is trading 1.31% from 52-week highs. Mid-Caps (IJH) and Small-Caps (IJR) advanced around 40 bps on the day. Microsoft gained more than 2% yesterday after announcing that former OpenAI chief Sam Altman will be joining the company to lead a new AI research team. The tech giant has surged nearly 60% year-to-date and hit fresh 52-week highs on Monday. Nvidia also added more than 2% yesterday ahead of its earnings report on Tuesday. Several retailers will also report earnings on Tuesday including Best Buy, Lowe’s, and Dicks’s Sporting Goods, Abercrombie and Fitch, and American Eagle Outfitters. Nordstrom will report quarterly results after the close. Investors will also be looking towards Existing Home Sales data and the release of the Federal Open Market Committee (FOMC) minutes from the October meeting.
All U.S. factor strategies finished higher on Monday with S&P 500 Momentum (SPMO, +1.05%) and S&P 500 High Beta (SPHB, +93 bps) leading the way. S&P 500 Growth (SPYG) and S&P 500 Quality (SPHQ) were each up around 80 bps while S&P 500 High Dividend (SPYD, +8 bps) lagged other factors. South Korea (EWY) climbed 2.02% and Hong Kong (EWH) rose 1.30% on Monday, lifting Developed ex-U.S. Markets (EFA, +38 bps). Emerging Markets (EEM) gained 1.24% as China (MCHI) advanced 2.20% and Brazil (EWZ) increased 2.00%. Mexico (EWW) and Taiwan (EWT) were both up at least 1% as well.
Sectors: Utilities (XLU) and Consumer Staples (XLP) were the only U.S. sectors to see losses on Monday, falling 30 bps and 7 bps, respectively. Technology (XLK) outpaced other sectors, climbing 1.45% on strength from Semiconductors (XSD, +1.91%), Software & Services (XSW, +1.46%), and Internet (XWEB, +1.22%). Communication Services (XLC) was also up 1.13% yesterday followed by Real Estate (XLRE, +78 bps), Health Care (XLV, +61 bps), and Consumer Discretionary (XLY, +52 bps). XLK and XLC both hit fresh 52-week highs. Financials (XLF) also rose 40 bps and Industrials (XLI) added 30 bps. XLK, XLI, and XLF all sit in overbought territory. All industries were in the green, except for Regional Banks (KRE, -11 bps) and Banks (KBE, -10 bps).
Themes: Water (PHO) dipped 23 bps and was the lone global thematic segment in negative territory yesterday. After a strong week last week, Solar (TAN) gained 3.07% and was the top performing segment. Multi-Theme (ARKK) also advanced 2.70% while Genomics (ARKG), Disruptive Tech (ARKW), Blockchain (BLOK), and 3D Printing (PRNT) all increased more than 2%. Evolving Consumer (SOCL) rose 1.85%, Casinos & Gaming (BETZ) added 1.47%, and Big Data (AIQ) was up 1.37%. Big Data (AIQ) and Cyber Security (HACK, +92 bps) are trading at 52-week highs. Disruptive Tech (ARKW), Big Data (AIQ), eSports & Video Games (ESPO), and Connectivity (FIVG) sit in overbought territory.
Commodities & Yields: At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.911% and the U.S. 10-Year Treasury Yield stood at 4.422%. The U.S. Dollar (UUP) declined 31 bps, U.S. Aggregate Bonds (AGG) added 16 bps, and 20+ Year Treasury Bonds (TLT) rose 61 bps yesterday. Broad Commodities (DJP) increased 86 bps, bolstered by Energy (DBE, +1.74%). WTI Crude Oil (USO) and Gasoline (UGA) were both up at least 2% while Natural Gas (UNG) slipped 2.76%. Silver (SLV) fell 1.24%, Industrial Metals (DBB) climbed 1.18%, and Sugar (CANE) advanced 1.52%.
Daily Note
11.19.2023
Equities: Another relatively flat session for U.S. equity markets on Friday with the S&P 500 (SPY) rising 12 bps, the Dow Jones Industrial Average (DIA) adding 3 bps, and the NASDAQ 100 (QQQ) inching higher by 2 bps. All three major averages finished higher for the 3rd consecutive week last week as SPY increased 2.31%, DIA advanced 2.08%, and QQQ gained 2.02%. Small-caps outperformed on Friday and last week with the Russell 2000 (IWM) climbing 1.37% and 5.43%, respectively. Treasury yields fell to the lowest levels since September on Friday with the U.S. 2-Year falling below 4.80% and the U.S. 10-Year dropping below 4.38% intraday. The Commerce Department reported that new housing construction and building permits were stronger than expected in October. New residential construction, including single-family and multifamily homes, increased 1.9% month-over-month and permits increased 1.1% month-over-month. On a yearly basis, new construction is down 4.2% and permits are down 4.4%. Gap rocketed more than 30% on Friday after reporting strong quarterly results that topped estimates. This week, investors will be looking towards Existing Home Sales figures, the release of the Federal Open Market Committee (FOMC) meeting minutes, Durable Goods Orders, and Consumer Sentiment data.
S&P 500 Low Volatility (SPLV) dipped 10 bps and was the only U.S. factor strategy in negative territory on Friday. S&P 500 Growth (SPYG) was flat while S&P 500 Enhanced Value (SPVU) advanced 1.8% and S&P 500 Pure Value (RPV) rose 95 bps. All factors gained more than 1.25% last week with S&P 500 High Beta (SPHB) climbing 5.45% and S&P 500 Dividend (SPYD) increasing 4.34%. S&P 500 Momentum (SPMO) is trading at 52-week highs. SPMO and S&P 500 Value (SPYV) also sit in overbought territory. Emerging Markets (EEM) added 13 bps on Friday on strength from Taiwan (EWT, +82 bps) and Mexico (EWW, +76 bps). Developed ex-U.S. Markets (EFA) gained 1.35% as Japan (EWJ), the U.K. (EWU), Germany (EWG), France (EWQ), and Australia (EWA) were all up more than 1%. Last week, EFA and EEM increased 3.98% and 2.63%, respectively. EFA entered overbought territory and is trading more than 4% above its 50-day moving average.
Sectors: 6 of the 11 U.S. sectors registered positive returns on Friday led by Energy (XLE, +2.10%). XLE benefitted from rising oil prices on Friday following a selloff earlier in the week. Oil & Gas Equipment & Services (XES) and Oil & Gas Exploration & Production (XOP) were both up more than 2% on the day. Consumer Discretionary (XLY) and Industrials (XLI) both advanced more than 60 bps while Financials (XLF) added 52 bps. Technology (XLK) and Health Care (XLV) both slumped around 20 bps and were the worst performing sectors. XLK and XLF sit in overbought territory. Biotech (XBI) outgained other industries on Friday, surging 3.61%. Last week, all sectors posted gains. Real Estate (XLRE) jumped 4.59% on the week while Materials (XLB), XLY, Utilities (XLU), and XLF all rose more than 3%. Over the past month, XLK has climbed nearly 8% while XLE has declined just over 7%.
Themes: Digital Infrastructure (SRVR) was the lone global thematic segment to see losses on Friday, slipping 2 bps. Genomics (ARKG) jumped 5.92% on the day followed by Cannabis (MJ, +4.38%) and Advanced Materials (REMX, +4.03%). Multi-Theme (ARKK) and Biotech (SBIO) were both up more than 3% while Space (UFO) added 2.01%. Disruptive Tech (ARKW), Online Retail (IBUY), Casinos & Gaming (BETZ), Fintech (FINX), and Robotics & AI (ROBO) all gained more than 1.15%. Big Data (AIQ, +34 bps) is the only segment sitting in overbought territory. Last week, Genomics (ARKG) surged 14.40% and Solar (TAN) climbed more than 10%. Most segments increased more than 5% on the week. In the past 3 months, Solar (TAN), Clean Energy (PBW), and Advanced Materials (REMX) are still down around 20%.
Commodities & Yields: Broad Commodities (DJP) added 38 bps on Friday as WTI Crude Oil (USO) rose 3.97%, Gasoline (UGA) increased 3.90%, and Copper (CPER) gained 1.26%. Gold (GLD) and Silver (SLV) were relatively flat while Corn (CORN) fell 90 bps. USO is down more than 10% over the past month. The U.S. Dollar (UUP) declined 54 bps, U.S. Aggregate Bonds (AGG) rose 20 bps, and 20+ Year Treasury Bonds (TLT) advanced 47 bps on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.842% and the U.S. 10-Year Treasury Yield stood at 4.445%.
Daily Note
11.17.2023
Equities: U.S. equity markets were relatively flat on Thursday as investors digested fresh earnings results and economic data along with October’s Consumer Price Index (CPI) and Producer Price Index (PPI) figures released earlier in the week. The S&P 500 (SPY) and the NASDAQ 100 (QQQ) added 12 bps and 9 bps, respectively, while the Dow Jones Industrial Average (DIA) dipped 7 bps. QQQ hit 52-week highs. Small-caps underperformed with the Russell 2000 (IWM) sinking 1.62%. Walmart declined more than 8% yesterday after offering a cautious outlook on consumer spending. The retail giant topped earnings and revenue estimates with revenue being bolstered by strong results from the grocery and e-commerce divisions. Macy’s jumped nearly 6% on the day after beating analysts’ quarterly expectations. Inventory and margin improvement helped offset a 7% year-over-year decline in sales. Alibaba reported mixed results and announced that it would not proceed with the full spinoff of its cloud group due to U.S. chip export restrictions. The Chinese e-commerce giant dropped more than 9% on Thursday. Cisco also decreased almost 10% following weak guidance and stronger-than-expected earnings and revenue results. On the economic front, the Labor Department’s price index for U.S. imports declined 0.8% for the month, more than the expected drop of 0.3%. Imports fell for the first time since June and saw the biggest one-month decline since March. On a year-over-year basis, import prices dropped 2%. Jobless claims also rose 13K to 231K for the week ended November 11, which has above expectations. Investors will be looking towards Housing Starts & Permits data on Friday.
S&P 500 Minimum Variance (SPMV, +34 bps) and S&P 500 Growth (SPYG, +21 bps) saw modest gains yesterday while most U.S. factor strategies were in the red. S&P 500 Pure Growth (RPG, -1.01%), S&P 500 Pure Value (RPV, -86 bps), and S&P 500 Enhanced Value (SPVU, -85 bps) were the worst performers. China (MCHI) sank 3.68% and South Africa (EZA) fell 2.78% on Thursday, dragging Emerging Markets (EEM, -96 bps) lower. Brazil (EWZ) added 21 bps and remains in overbought territory. Developed ex-U.S. Markets (EFA) dipped 7 bps as Hong Kong (EWH) declined 1.96%, Australia (EWA) dropped 95 bps, and South Korea (EWY) rose 71 bps.
Sectors: Energy (XLE) underperformed other U.S. sectors yesterday, falling 1.95% as U.S. crude oil prices retreated amid rising inventories and shrinking industrial production. Oil & Gas Equipment & Services (XES, -3.96%) and Oil & Gas Exploration & Production (XOP, -2.89%) were also weak. Consumer Staples (XLP) and Consumer Discretionary (XLY) were both down more than 1% while Real Estate (XLRE) inched lower by 3 bps. All other sectors posted gains led by Utilities (XLU, +53 bps) and Technology (XLK, +50 bps). Communication Services (XLC), Health Care (XLV), and Financials (XLF) all rose at least 40 bps on the day. XLC and XLK hit fresh 52-week highs and XLK is the only sector sitting in overbought territory. Retail (XRT, -3.42%) lagged most other sectors yesterday following underwhelming earnings results. Most industries finished lower.
Themes: Global themes underperformed on Thursday with all segments registering negative returns, except for Water (PHO, +22 bps), Smart Infrastructure (GRID, +20 bps), and Digital Infrastructure (SRVR, +20 bps). Advanced Materials (REMX) saw the worst returns, plunging 4.59%. REMX is down nearly 23% over the past 3 months and is trading just 1.13% from 52-week lows. Cannabis (MJ) and Clean Energy (PBW) declined 3.88% and 3.64%, respectively, while Blockchain (BLOK), Solar (TAN), Genomics (ARKG), Online Retail (IBUY), and Industrial Revolution (ARKQ) all slipped more than 2%. Big Data (AIQ) dipped 24 bps on the day but remains in overbought territory.
Commodities & Yields: U.S. Aggregate Bonds (AGG) increased 55 bps, 20+ Year Treasury Bonds (TLT) climbed 1.24%, and the U.S. Dollar (UUP) added 7 bps yesterday. At Thursday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.842% and the U.S. 10-Year Treasury Yield stood at 4.445%. Broad Commodities (DJP, -1.79%) were pulled lower by Energy (DBE, -4.16%). WTI Crude Oil (USO) dropped 4.61%, Gasoline (UGA) was down 4.50% while Gold (GLD) and Silver (SLV) both rose more than 1%. Industrial Metals (DBB, -1.06%) and Agriculture (DBA, -76 bps) also saw losses.
Daily Note
11.16.2023
Equities: Following softer-than-expected Producer Price Index (PPI) results, U.S. equity markets finished moderately higher on Wednesday. The Dow Jones Industrial Average (DIA) increased 53 bps, the S&P 500 (SPY) rose 21 bps, and the NASDAQ 100 (QQQ) added 7 bps. QQQ is now trading just 4 bps from fresh 52-week highs while DIA and SPY are trading within 2% of 52-week highs. The PPI declined 0.5% month-over-month in October against the +0.1% expectation. The monthly decline was the largest since 2020. Year-over-year, headline PPI posted a 1.3% increase, down from +2.2% in September. Core PPI, which excludes volatile food and energy prices, was flat on the month. In a separate report from the Commerce Department released yesterday, Retail Sales dropped 0.1% in the month of October, the first monthly decline since March. In other economic news, the Empire State Manufacturing Survey, saw an unexpected increase of 14 points to 9.1, better than the estimate for a -3 reading. The number represents the percentage of companies seeing expansion against contraction, so any positive number indicates growth. Earnings wise, Target surged nearly 18% on Wednesday after topping estimates on the top and bottom lines for the 3rd quarter. However, comparable sales dropped nearly 5% year over year, as customers bought fewer discretionary items, and digital sales declined by 6% on the year. Walmart will be reporting earnings figures on Thursday.
S&P 500 Momentum (SPMO, -45 bps) and S&P 500 Minimum Variance (SPMV, -21 bps) underperformed other U.S. factor strategies yesterday, most of which finished in positive territory. S&P 500 High Beta (SPHB) gained 1.29% followed by S&P 500 Dividend (SPYD, +99 bps) and S&P 500 Pure Value (RPV, +66 bps). Developed ex-U.S. Markets (EFA) slipped 15 bps as Japan (EWJ) decreased 75 bps, Hong Kong (EWH) climbed 1.99%, and South Korea (EWY) rose 73 bps. Germany (EWG, +55 bps) and the Netherlands (EWN, +41 bps) moved further into overbought territory. Emerging Markets (EEM, +84 bps) were bolstered by China (MCHI, +2.09%) and South Africa (EZA, +1.52%). MCHI is relatively flat over the past 3 months and down 4.62% year-to-date.
Sectors: All U.S. sectors posted gains on Wednesday, except for Utilities (XLU, -31 bps) and Energy (XLE, -19 bps). XLE was impacted by losses from Oil & Gas Equipment & Services (XES, -1.83%). Consumer Staples (XLP) saw the strongest returns, advancing 80 bps. Financials (XLF) added 55 bps, Communication Services (XLC) and Materials (XLB) were both up more than 40 bps, and Industrials (XLI) and Real Estate (XLRE) each rose more than 20 bps. Consumer Discretionary (XLY), Technology (XLK), and Health Care (XLV) all increased around 10 bps. XLC and XLK both hit fresh 52-week highs. On the industry level, Retail (XRT) advanced 2.18% while Semiconductors (XSD), Transportation (XTN), Regional Banks (KRE), Telecom (XTL), Banks (KBE), and Pharmaceuticals (XPH) were all up more than 1%. KRE and KBE have both climbed more than 10% over the past month.
Themes: Most global thematic segments were in the green yesterday led by Blockchain (BLOK, +3.87%). Online Retail (IBUY), Genomics (ARKG), Multi-Theme (ARKK), Disruptive Tech (ARKW), and Clean Energy (PBW) were all up more than 2% while Industrial Revolution (ARKQ) advanced 1.58%. FinTech (FINX) rose 1.40%, 3D Printing (PRNT) gained 1.38%, Solar (TAN) continued its rally, rising 1.35%, and Evolving Consumer (SOCL) increased 1.31%. Cannabis (MJ) and Casinos & Gaming (BETZ) were the worst performing segments on the day, falling 1.28% and 1.03%, respectively. Cyber Security (HACK) dipped 62 bps while Wind (FAN), Smart Infrastructure (GRID), and Water (PHO) saw moderate losses. 3 Segments sit in overbought territory: Big Data (AIQ), eSports & Video Games (ESPO), and Disruptive Tech (ARKW).
Commodities & Yields: The U.S. Dollar (UUP) rose 38 bps, U.S. Aggregate Bonds (AGG) fell 62 bps, and 20+ Year Treasury Bonds (TLT) sank 1.40% yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.916% and the U.S. 10-Year Treasury Yield stood at 4.533%. Broad Commodities (DJP) dipped 13 bps with Energy (DBE) slipping 87 bps and Industrial Metals (DBB) adding 80 bps. WTI Crude Oil (USO) sank 1.86%, Silver (SLV) climbed 1.32%, and Wheat (WEAT) declined 1.39%. WEAT has slipped nearly 29% year-to-date.
Daily Note
11.15.2023
Equities: U.S. equity markets posted strong returns on Tuesday as investor sentiment was lifted by the latest Consumer Price Index (CPI) results. The tech-heavy NASDAQ 100 (QQQ) jumped 2.15%, the S&P 500 (SPY) gained 1.94%, and the Dow Jones Industrial Average (DIA) rose 1.41%. All major averages continue to approach overbought territory and QQQ is now trading just 11 bps from new 52-week highs. Small-Caps (IJR) and Mid-Caps (IJH) outperformed, surging 5.44% and 3.90%, respectively. The CPI was flat month-over-month in October, according to data released by the Labor Department yesterday. Year-over-year, the index increased 3.2%. Excluding volatile food and energy prices, the core CPI rose 0.2% month-over-month and 4% year-over-year, against the forecast of 0.3% and 4.1%. The annual rate was the smallest increase since September 2021. Treasury yields plunged following the results and traders also took any potential Fed rate hikes almost completely off the table, according to CME Group data. Investors will now be looking towards Wednesday’s Producer Price Index (PPI) results. Separately, Home Depot climbed more than 5% on Tuesday after reporting stronger-than-expected quarterly earnings and revenue results. However, the home improvement retailer issued tepid forward guidance. Other retailers, including Walmart, Target, and Macy’s are all scheduled to report earnings later this week.
All U.S. factor strategies were up more than 1.25% yesterday. S&P 500 High Beta (SPHB) and S&P 500 High Dividend (SPYD) both gained more than 4% while S&P 500 Pure Value (RPV) added 3.28%. S&P 500 Momentum (SPMO, +1.63%) hit fresh 52-week highs and entered overbought territory. Developed ex-U.S. Markets (EFA) rose 2.55% on Tuesday as South Korea (EWY), Germany (EWG), the Netherlands (EWN), Australia (EWA), and France (EWQ) all increased more than 3%. EWN and EWG entered overbought territory. Emerging Markets (EEM, +2.66%) were lifted by South Africa (EZA, +5.73%), Mexico (EWW, +4.24%) and Brazil (EWZ, +3.25%). EWZ also entered overbought territory.
Sectors: Real Estate (XLRE) rocketed 5.40% on Tuesday and led other U.S. sectors, all of which registered positive returns. XLRE received a boost from Homebuilders (XHB), which advanced 5.88%. Utilities (XLU, +3.99%), Consumer Discretionary (XLY, +3.37%), and Materials (XLB, +2.95%) were also strong while Industrials (XLI) and Technology (XLK) each increased around 2%. Financials (XLF), Communication Services (XLC), and Consumer Staples (XLP) all climbed more than 1%. XLF was bolstered by outperformance from Regional Banks (KRE, +7.36%) and Banks (KBE, +6.25%). XLK and XLC both hit new 52-week highs and XLK re-entered overbought territory. Health Care (XLV) was the worst performing sector, adding just 68 bps.
Themes: All global thematic segments were in the green yesterday led by Solar (TAN, +10.36%), Genomics (ARKG, +8.85%), and Clean Energy (PBW, +8.20%). Despite Tuesday’s sizeable gains, these 3 embattled segments remain among the worst performing segments across the 3-month, year-to-date, and 1-year periods. Wind (FAN), Biotech (SBIO), 3D Printing (PRNT), Digital Infrastructure (SRVR), Multi-Theme (ARKK), and Online Retail (IBUY) all rose more than 5%. NextGen Transportation (DRIV), Industrial Revolution (ARKQ), Casinos & Gaming (BETZ), and Robotics & AI (ROBO) were all up over 4%. Cyber Security (HACK, +2.59%) hit new 52-week highs and Big Data (AIQ, +2.73%) entered overbought territory. eSports & Video Games (ESPO) lagged, inching higher by just 9 bps.
Commodities & Yields: At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 4.817% and the U.S. 10-Year Treasury Yield stood at 4.441%. The U.S. Dollar (UUP) sank 1.58%, U.S. Aggregate Bonds (AGG) increased 1.26%, and 20+ Year Treasury Bonds (TLT) jumped 2.27%. Broad Commodities (DJP) dipped 9 bps despite gains from Precious Metals (DBP, +1.25%) and Industrial Metals (DBB, +59 bps). Natural Gas (UNG) slipped 3.87%, Silver (SLV) jumped 3.62%, and Sugar (CANE) fell 1.43%.
Global Thematic Playbook
11.15.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Factor Playbook
11.14.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.14.2023
Equities: Ahead of Tuesday’s Consumer Price Index (CPI) results and Wednesday’s Producer Price Index (PPI) results, U.S. equity markets were mixed yesterday. The Dow Jones Industrial Average (DIA) increased 16 bps while the NASDAQ 100 (QQQ) and the S&P 500 (SPY) declined 31 bps and 10 bps, respectively. All three major averages are trading above relative 50-day and 200-day moving averages and are approaching overbought territory. Headwinds stemmed from Moody’s changing the outlook on the credit rating of the United States to “negative” from “stable” on Friday. The ratings agency pointed to the nation’s worsening fiscal position and political polarization as long-term concerns for America’s economy. The change falls short of a downgrade to America’s credit rating, which Moody’s maintained at the highest AAA level. In August, Fitch lowered its U.S. long-term rating to AA+ from its top mark of AAA. On the earnings front, Tyson Foods beat earnings estimates on Monday, but revenue was short of forecasts as sales of beef and pork declined. The food processing giant also issued disappointing 2024 guidance. Home Depot, Target, Cisco, Palo Alto Networks, and Walmart are also slated to report quarterly results this week, amongst other companies.
Most U.S. factor strategies saw losses on Monday as S&P 500 Dividend (SPYD) dropped 70 bps, S&P 500 High Beta (SPHB) fell 56 bps, and S&P 500 Pure Value (RPV) sank 38 bps. S&P 500 Momentum (SPMO) gained 46 bps to new 52-week highs and S&P 500 Pure Growth (RPG) added 27 bps. Emerging Markets (EEM) inched lower by 3 bps yesterday despite solid returns from China (MCHI, +99 bps). Taiwan (EWT) and Thailand (THD) were each down around 40 bps. MCHI has declined more than 6% over the past 3 months. Developed ex-U.S. Markets (EFA) increased 26 bps with Hong Kong (EWH) climbing 1.30% and the U.K. (EWU) rising 74 bps.
Sectors: U.S. sectors were split on Monday with Utilities (XLU) sinking 1.19% and Energy (XLE) advancing 72 bps. Real Estate (XLRE) and Technology (XLK) were also weak, dropping 84 bps and 58 bps, respectively. XLK exited overbought territory. Communication Services (XLC) fell 22 bps and Financials (XLF) and Materials (XLB) each dipped around 15 bps. Health Care (XLV) rose 58 bps as Health Care Equipment (XHE) jumped 1.98%. Consumer Discretionary (XLY) increased 43 bps followed by Consumer Staples (XLP, +32 bps) and Industrials (XLI, +9 bps). XLK has been the top performing sector across the 1-month, 3-month, and year-to-date periods.
Themes: Clean Energy (PBW) climbed 93 bps yesterday, outgaining other global thematic segments. PBW is still down 14.62% in the past month and 34.44% over the past 3 months. Industrial Revolution (ARKQ) rose 89 bps and Advanced Materials (REMX) increased 81 bps while FinTech (FINX) and Solar (TAN) each added 75 bps. Digital Payments (IPAY) and Disruptive Tech (ARKW) were also up over 50 bps on the day. eSports & Video Games (ESPO) advanced 29 bps and is the only segment sitting in overbought territory. Blockchain (BLOK) was the worst performing segment, slipping 1.40%. Genomics (ARKG, -1.04%), Wind (FAN, -77 bps), and Online Retail (IBUY, -57 bps) also underperformed.
Commodities & Yields: Broad Commodities (DJP) jumped 2.08% on Monday with all broad-based sectors in the green. Natural Gas (UNG) surged 6.16% WTI Crude Oil (USO) rose 1.57%, Copper (CPER) advanced 1.69%, and Agriculture (DBA) increased 1.45%. UNG is still down more than 10% in the past month. The U.S. Dollar (UUP) dipped 13 bps, U.S. Aggregate Bonds (AGG) inched lower by 1 bps, and 20+ Year Treasury Bonds (TLT) fell 23 bps. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 5.041% and the U.S. 10-Year Treasury Yield stood at 4.632%.
Daily Note
11.13.2023
Equities: On Friday, U.S. equity markets rose sharply as treasury yields stabilized and investors considered fresh Consumer Sentiment data. The tech-heavy NASDAQ 100 (QQQ) surged 2.25%, the S&P 500 (SPY) increased 1.56%, and the Dow Jones Industrial Average (DIA) gained 1.15%. Last week, all three major averages finished higher with QQQ adding 2.90%, SPY advancing 1.36%, and DIA rising 70 bps. After topping 4.65% on Thursday, the U.S. 10-Year Treasury Yield was relatively flat on Friday. Consumer sentiment slumped in November as inflation expectations rose, according to the latest survey from the University of Michigan. The headline sentiment index showed a reading of 60.4, down 5.3% from 63.8 in October and below the estimate for 63.7. The current conditions index fell 6.9% month-over-month. Inflation expectations continued to climb with the one-year outlook rising to 4.4%, the highest since April. The five-year expectation also climbed to 3.2%, tied for the highest since June 2008. Wynn Resorts slipped more than 5% on Friday even after reporting a beat on the top and bottom line in the third quarter. Disappointing results in the company’s Macau segment shook investor confidence, however. Plug Power tumbled 40.47% Friday to hit new 52-week lows, following disappointing Q3 results. The company also issued a "going concern" notice regarding its potential inability to fund operations over the next year. This week, investors will be looking towards Consumer Price Index (CPI) data, Producer Price Index (PPI) results, Retail Sales figures, and Housing Starts & Permits statistics.
All U.S. factor strategies were in the green on Friday with most gaining more than 1%. S&P 500 Momentum (SPMO, +2.08%) and S&P 500 High Beta (SPHB, +1.99%) were the best performing factors while S&P 500 Quality (SPHQ) and S&P 500 Growth (SPYG) each increased more than 1.70%. Last week, factors were split with SPMO climbing nearly 3%, S&P 500 Dividend (SPYD) dropping 2.77%, and S&P 500 Enhanced Value (SPVU) sinking 2.11%. SPMO is trading at 52-week highs. Developed ex-U.S. Markets (EFA) added 45 bps on Friday as the Netherlands (EWN) gained 1.44% and Japan (EWJ) advanced 97 bps. Emerging Markets (EEM, +71 bps) were lifted by Mexico (EWW, +1.93%), Brazil (EWZ, +1.85%), and Taiwan (EWT, +1.60%. Last week, EEM dipped 29 bps and EFA fell 80 bps.
Sectors:All U.S. sectors posted gains on Friday with Technology (XLK, +2.61%) leading the charge. XLK was bolstered by solid returns from Semiconductors (XSD, +4.57%) and Software & Services (XSW, +1.85%). Consumer Discretionary (XLY) and Communication Services (XLC) were each up around 1.60% while Industrials (XLI) increased 1.44%. XLK and XLC are now trading within 50 bps of 52-week highs and XLK entered overbought territory. Materials (XLB), Financials (XLF), Real Estate (XLRE), and Energy (XLE) all added more than 1%. Utilities (XLU) was the worst performer advancing 53 bps. Last week, XLK jumped 4.52% and XLC rose 1.35% while Energy (XLE) declined 3.77%. XLU and XLRE were both down more than 4% on the week while XLB sank 1.81%. XLE has dropped nearly 6% over the past month.
Themes: All global thematic segments registered positive returns on Friday, except for Clean Energy (PBW, -1.16%), Advanced Materials (REMX, -1.13%), and Solar (TAN, -38 bps). Cannabis (MJ) outgained other segments, increasing 4.08%. Connectivity (FIVG) and Cloud Computing (SKYY) both rose more than 2% while Disruptive Tech (ARKW), Big Data (AIQ), Multi-Theme (ARKK), eSports & Video Games (ESPO), and Cyber Security (HACK) all gained more than 1.50%. Industrial Revolution (ARKQ) and Casinos & Gaming (BETZ) were both up around 1.30%. Last week, most segments finished lower. Biotech (SBIO) and Clean Energy (PBW) both plunged nearly 9% while Genomics (ARKG) and Solar (TAN) both slipped more than 7%. eSports & Video Games (ESPO) outperformed, climbing 3.23%.
Commodities & Yields: The U.S. Dollar (UUP) inched lower by 7 bps, U.S. Aggregate Bonds (AGG) added 23 bps, and 20+ Year Treasury Bonds (TLT) increased 56 bps on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 5.062% and the U.S. 10-Year Treasury Yield stood at 4.628%. Broad Commodities (DJP) dipped 32 bps despite gains from Energy (DFBE, +1.41%). WTI Crude Oil (USO) rose 2.19%, Gold (GLD) sank 1.09%, Industrial Metals (DBB) dropped 86 bps, and Wheat (WEAT) declined 1.37%.
U.S. Sector & Industry Playbook
11.13.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Size & Style Playbook
11.12.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.10.2023
Equities: U.S. equity markets retreated on Thursday following a speech from Federal Reserve Jerome Powell. The S&P 500 (SPY) fell 78 bps, the NASDAQ 100 (QQQ) declined 77 bps, and the Dow Jones Industrial Average (DIA) slipped 59 bps. Underperformance for Small-Caps continued with the Russell (IWM) dipping another 1.55%. Week-to-date, IWM is down more than 4%. In a speech at a conference hosted by the International Monetary Fund on Thursday, Powell left the door open for additional interest rate hikes and indicated more work may need to be done to bring down inflation. He did note that the recent slowdown in inflation has been an encouraging sign for policymakers. Fed Governor Michelle Bowman also said Thursday she still expects interest rates to rise but supported the decision earlier this month to hold. Separately, Richmond Fed President Thomas Barkin said he expects “some sort of a slowdown” in the economy ahead but sees inflation as still too high. Treasury Yields moved higher following Powell’s comments with the 2-Year rising above 5% and the 10-Year nearing 4.65%. Separately, jobless claims dropped 3K to 216K for the week ended November 4, which was slightly below estimates. On the earnings front, Disney climbed nearly 7% after reporting better-than-expected profit and expanding its cost-cutting plan after the close on Wednesday. MGM Resorts decreased more than 1% yesterday even after posting strong results and unveiling a new share buyback program.
All U.S. factors registered negative returns yesterday. S&P 500 Dividend (SPYD, -1.47%) and S&P 500 High Beta (SPHB, -1.33%) saw the weakest returns followed by S&P 500 Dividend + Low Volatility (SPHD, -1.06%). S&P 500 Low Volatility (SPLV) dipped just 42 bps. SPYD is down 3.51% week-to-date. Emerging Markets (EEM, -94 bps) were pulled lower by South Africa (EZA, -1.86%), Mexico (EWW, -1.61%), Thailand (THD, -1.57%), and China (MCHI, -1.32%). Developed ex-U.S. Markets (EFA) inched lower by 1 bps as South Korea (EWY) fell another 99 bps and Japan (EWJ) gained 42 bps.
Sectors: All U.S. sectors also finished lower with Health Care (XLV, -2.07%) falling the furthest. XLV was dragged lower by Biotech (XBI, -4.09%), Pharmaceuticals (XPH, -3.74%), and Health Care Equipment (XHE, -2.49%). XLV is trading 1.93% from 52-week lows. Consumer Discretionary (XLY) slipped 1.87%, Real Estate (XLRE) dropped 1.53%, and Utilities (XLU) decreased 1.32%. Materials (XLB) also sank 86 bps while Technology (XLK), Financials (XLF), and Consumer Staples (XLP) all declined more than 40 bps. Communication Services (XLC) dipped just 3 bps on the day. All industries were also lower except for Aerospace & Defense (XAR, +68 bps) and Oil & Gas Equipment & Services (XES, +0.00%).
Themes: Just 4 global thematic segments posted gains on Thursday: Blockchain (BLOK, +82 bps), Smart Infrastructure (GRID, +71 bps), Space (UFO, +32 bps), and eSports & Video Games (ESPO, +11 bps). ESPO continues to move closer to overbought territory. Biotech (SBIO) and Genomics (ARKG) underperformed, slipping 5.57% and 4.27%, respectively. Multi-Theme (ARKK) and Clean Energy (PBW) were each down at least 3% while Casinos & Gaming (BETZ), Cannabis (MJ), Online Retail (IBUY), and Solar (TAN) all declined more than 2%. Advanced Materials (REMX) also dropped 1.15% to new 52-week lows. REMX, PBW, TAN, and SBIO are approaching oversold territory.
Commodities & Yields: U.S. Aggregate Bonds (AGG) fell 84 bps, 20+ Year Treasury Bonds (TLT) sank 2.30%, and the U.S. Dollar (UUP) increased 44 bps yesterday. At Wednesday’s close, the U.S. 2-Year Treasury Yield stood at 5.022% and the U.S. 10-Year Treasury Yield stood at 4.492%. Broad Commodities (DJP) decreased 48 bps with Natural Gas (UNG) slipping 3.06%, Gold (GLD) adding 40 bps, Industrial Metals (DBB) declining 58 bps, and Wheat (WEAT) retreating 1.18%.
Daily Note
11.9.2023
Equities: The S&P 500 (SPY) and the NASDAQ 100 (QQQ) extended their winning streaks on Wednesday adding 7 bps and 6 bps, respectively. Yesterday marked the 9th straight day of positive returns for QQQ and the 8th straight day of gains for SPY. Meanwhile, the Dow Jones Industrial Average (DIA) dipped 12 bps to end its winning streak at 7 days. Small-Caps underperformed once again with the Russell 2000 (IWM) falling 1.07%. Warner Bros. Discovery plummeted more than 19% on Wednesday after reporting a wider-than-expected loss and a quarterly decline in ad revenue. Roblox surged nearly 12% after posting stronger-than-expected third-quarter results. Occidental Petroleum surpassed analyst expectations after the close on Tuesday and increased 1.58% on the day. After yesterday’s close, Disney topped earnings expectations thanks in part to profit at ESPN+ and continued growth at theme parks. However, ad revenue dropped, weighing on the top line. Disney also said it plans to increase its cost-cutting measures by an additional $2 billion to a target of $7.5 billion. In speeches on Wednesday, Fed Chairman Jerome Powell and Fed Vice Chair Philip Jefferson did not comment on monetary policy. Powell is slated to speak again on Thursday afternoon. Consumer Sentiment data will also be released on Friday.
Most U.S. factor strategies were in the red on Wednesday with value-oriented pockets of the markets falling the furthest. S&P 500 Pure Value (RPV) slipped 96 bps and S&P 500 Enhanced Value (SPVU) dropped 73 bps. S&P 500 Momentum (SPMO, +64 bps) and S&P 500 Growth (SPYG, +23 bps) were the top performing factors on the day. SPMO is trading 68 bps from 52-week highs. Developed ex-U.S. Markets (EFA) dipped 13 bps on losses from South Korea (EWY, -1.91%), Japan (EWJ, -1.65%), and Hong Kong (EWH, -1.15%). Emerging Markets (EEM) declined 67 bps with Malaysia (EWM) and Indonesia (EIDO) falling more than 90 bps. China (MCHI) was also down 62 bps.
Sectors: U.S. sectors were split yesterday with no sectors rising more than 60 bps. Real Estate (XLRE, +58 bps) and Technology (XLK, +57 bps) were the top performing sectors followed by Materials (XLB, +31 bps) and Industrials (XLI, +23 bps). Financials (XLF) also added 12 bps. The losing streak for Energy (XLE) continued as the sector sank another 1.25%. XLE is trading below its 50-day and 200-day moving averages and is nearing oversold territory. Utilities (XLU, -73 bps), Communication Services (XLC, -47 bps), and Consumer Staples (XLP, -39 bps) were also weak. All industries posted losses with Biotech (XBI, -2.92%), Oil & Gas Exploration & Production (XOP, -2.15%), Retail (XRT, -1.80%), and Health Care Equipment (XHE, -1.77%) seeing the worst returns.
Themes: After outperforming on Tuesday, Genomics (ARKG) declined 4.10% and lagged other global thematic segments on Wednesday. Solar (TAN) dropped 3.12%, Biotech (SBIO) sank 2.38%, and Clean Energy (PBW) retreated 1.80%. PBW has slipped 12.53% in the past month and nearly 35% over the past 3 months. Blockchain (BLOK), Multi-Theme (ARKK), Advanced Materials (REMX), and Space (UFO) all fell more than 1% yesterday. Digital Payments (IPAY) outgained other segments, climbing 1.84%. eSports & Video Games (ESPO, +93 bps), Casinos & Gaming (BETZ, +78 bps), and FinTech (FINX, +66 bps) also saw solid returns on Wednesday. Most segments are still trading below relative 50-day and 200-day moving averages.
Commodities & Yields: At Wednesday’s close, the U.S. 2-Year Treasury Yield stood at 4.936% and the U.S. 10-Year Treasury Yield stood at 4.492%. The U.S. Dollar (UUP) inched lower by 3 bps, U.S. Aggregate Bonds (AGG) increased 34 bps, and 20+ Year Treasury Bonds (TLT) jumped 1.70%. Broad Commodities (DJP) slipped 1.01% as Energy (DBE) dropped another 1.85% and Precious Metals (DBP) declined 88 bps. WTI Crude Oil (USO) was down another 2.24% and is now roughly flat year-to-date. Gasoline (UGA, -1.46%), Gold (GLD, -1.00%), and Copper (CPER, -1.31%) also finished lower yesterday.
U.S. Factor Playbook
11.8.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Global Thematic Playbook
11.8.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.8.2023
U.S. equity markets posted gains once again on Tuesday as investors weighed rhetoric from Federal Reserve officials, fresh earnings results, and U.S. trade deficit data. The tech-heavy NASDAQ 100 (QQQ) climbed 95 bps, the S&P 500 (SPY) increased 29 bps, and the Dow Jones Industrial Average (DIA) added 15 bps. The winning streak stands at 9 consecutive sessions for QQQ and 8 consecutive sessions for SPY and DIA. Small-Caps (IJR) and Mid-Caps (IJH) underperformed falling, 73 bps and 25 bps, respectively. Chicago Federal Reserve President Austan Goolsbee said Tuesday that a soft landing is still possible as the central bank continues to combat inflation. The Fed president noted that while core inflation is still well above the 2% target but said that the decline in price pressures so far has already been a great achievement. Earnings wise, Datadog jumped more than 28% yesterday after topping earnings expectations and issuing encouraging forward guidance. Uber reported results that missed estimates on the top and bottom lines. The company’s revenue increased 11% year-over-year for the quarter. Planet Fitness also surged over 13% on the day after beating on earnings and revenue. In September, the U.S. trade deficit grew for the 1st time in 3 months to %61.5 billion. The increase was above forecasts and the trade imbalance with China reached its highest levels since September 2022. Exports of goods and services also reached their highest levels since August 2022. Fed Chairman Jerome Powell is slated to speak Wednesday morning along with several other officials Wednesday afternoon.
Another mixed session for U.S. factor strategies yesterday. S&P 500 High Beta (SPHB) and S&P 500 Growth (SPYG) were each up more than 40 bps while S&P 500 Enhanced Value (SPVU) fell 91 bps and S&P 500 Dividend (SPYD) dropped 77 bps. SPYD is down more than 9% year-to-date while SPYG has risen nearly 21%. Developed ex-U.S. Markets (EFA) declined 61 bps on Tuesday as South Korea (EWY), Hong Kong (EWH), and Australia (EWA) all slipped more than 1%. Emerging Markets (EEM) dipped 18 bps, dragged lower by South Africa (EZA, -2.16%). Thailand (THD), Mexico (EWW), and Indonesia (EIDO) all sank around 85 bps as well.
Energy (XLE) finished lower for the 3rd straight day on Tuesday, decreasing 2.22% as WTI Crude Oil and Brent Crude Oil hit their lowest prices since August. Oil & Gas Equipment & Services (XES, -5.02%) and Oil & Gas Exploration & Production (XOP, -2.83%) were also weak. Materials (XLB) declined 1.94% followed by Real Estate (XLRE, -84 bps) and Utilities (XLU, -73 bps). Industrials (XLI) also fell 25 bps and Financials (XLF) dipped 15 bps. Consumer Discretionary (XLY) and Technology (XLK) were the top performing sectors on the day both climbing around 1.10%. XLK received a boost from Internet (XWEB, +2.65%) and Software & Services (XSW, +2.28%). Communication Services (XLC) added 53 bps while Consumer Staples (XLP) and Health Care (XLV) saw modest gains.
Most global thematic segments registered positive returns yesterday led by Genomics (ARKG, +3.24%) and Multi-Theme (ARKK, +2.87%). Disruptive Tech (ARKW) and Cloud Computing (SKYY) each rose more than 2% while Online Retail (IBUY) increased 1.84%. Blockchain (BLOK), Cyber Security (HACK), eSports & Video Games (ESPO), and Evolving Consumer (SOCL) all gained more than 1% on the day. ARKW, BLOK, and ESPO are nearing overbought territory. Wind (FAN), Digital Infrastructure (SRVR), and Advanced Materials (REMX) underperformed other segments, all dropping more than 1%. Smart Infrastructure (GRID), Space (UFO), and Robotics & AI (ROBO) were all down more than 50 bps as well.
Broad Commodities (DJP) sank 1.91% on Tuesday as Energy (DBE) slipped 3.62%, Agriculture (DBA) declined 1.34%, and Precious Metals (DBP) dipped 73 bps. WTI Crude Oil (USO) and Brent Crude Oil (BNO) were both down more than 4%, Silver (SLV) fell 1.66%, and Corn (CORN) decreased 1.39%. U.S. Aggregate Bonds (AGG) rose 53 bps, 20+ Year Treasury Bonds (TLT) increased 1.47%, and the U.S. Dollar (UUP) added 34 bps. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 4.918% and the U.S. 10-Year Treasury Yield stood at 4.571%.
Daily Note
11.7.2023
On Friday, U.S. equity markets finished higher to cap off a strong week last week with the NASDAQ 100 (QQQ) climbing 1.17%, the S&P 500 (SPY) rising 91 bps, and the Dow Jones Industrial Average (DIA) increasing 66 bps. Last week, QQQ climbed 6.45%, SPY advanced 5.85%, and DIA was up 5.06%. Last week was the strongest weekly performance all year for each of the three major averages. Investor sentiment was lifted by a softer-than-expected employment situation report on Friday. The U.S. economy saw job creation decelerate in October, confirming persistent expectations for a slowdown and possibly taking some heat off the Federal Reserve in its fight against inflation. Nonfarm payrolls increased by 150K for the month, the Labor Department reported Friday, against the forecast for a rise of 170K. This week, as earnings season winds down, investors will be looking towards quarterly results from Walt Disney, Wynn and MGM Resorts, Occidental Petroleum and D.R. Horton along with several speeches from Federal Reserve officials and Consumer Sentiment data.
Emerging Markets (EEM, +81 bps) were lifted by Malaysia (EWM, +1.70%) and Indonesia (EIDO, +89 bps) on Monday. China (MCHI) also added 60 bps while Thailand (THD) decreased 1.12%. Developed ex-U.S. Markets (EFA) declined 50 bps despite solid gains from South Korea (EWY, +5.04%). Japan (EWJ) sank 1.29%, the Netherlands (EWN) slipped 73 bps, and France (EWQ) fell 59 bps.
Just 4 of the 11 U.S. sectors registered positive returns on Monday. Health Care (XLV) and Technology (XLK) were the top performers, rising 67 bps and 66 bps, respectively. Consumer Staples (XLP) and Consumer Discretionary (XLY) were each up around 15 bps. Real Estate (XLRE) saw the weakest returns, declining 1.37%. Energy (XLE) also underperformed once again, sinking 1.13%. XLE was impacted by losses from Oil & Gas Exploration & Production (XOP, -2.66%) and Oil & Gas Equipment & Services (XES, -2.17%). Financials (XLF, -30 bps) was also dragged lower by Regional Banks (KRE, -1.42%) and Banks (KBE, -1.40%). All industries were in the red yesterday.
Big Data (AIQ, +36 bps) and Evolving Consumer (SOCL, +16 bps) were the only global thematic segments to post gains yesterday. Connectivity (FIVG) was flat while Space (UFO) dropped 5.20%. Genomics (AKRG), Clean Energy (PBW), and Biotech (SBIO) all fell more than 2% followed by Solar (TAN, -1.83%), Multi-Theme (ARKK, -1.66%), and Digital Infrastructure (SRVR, -1.55%). Advanced Materials (REMX), Cannabis (MJ), Industrial Revolution (ARKQ), Disruptive Tech (ARKW), and FinTech (FINX) were all down more than 1%.
The U.S. Dollar (UUP) added 10 bps, U.S. Aggregate Bonds (AGG) fell 50 bps, and 20+ Year Treasury Bonds (TLT) declined 97 bps yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.941% and the U.S. 10-Year Treasury Yield stood at 4.662%. Broad Commodities (DJP) slipped 9 bps as Natural Gas (UNG) plunged 6.06%, Gasoline (UGA) increased 1.64%, Gold (GLD) dropped 78 bps, and Copper (CPER) rose 1.27%.
Daily Note
11.6.2023
Equities: On Friday, U.S. equity markets finished higher to cap off a strong week last week with the NASDAQ 100 (QQQ) climbing 1.17%, the S&P 500 (SPY) rising 91 bps, and the Dow Jones Industrial Average (DIA) increasing 66 bps. Last week, QQQ climbed 6.45%, SPY advanced 5.85%, and DIA was up 5.06%. Last week was the strongest weekly performance all year for each of the three major averages. Investor sentiment was lifted by a softer-than-expected employment situation report on Friday. The U.S. economy saw job creation decelerate in October, confirming persistent expectations for a slowdown and possibly taking some heat off the Federal Reserve in its fight against inflation. Nonfarm payrolls increased by 150K for the month, the Labor Department reported Friday, against the forecast for a rise of 170K. This week, as earnings season winds down, investors will be looking towards quarterly results from Walt Disney, Wynn and MGM Resorts, Occidental Petroleum and D.R. Horton along with several speeches from Federal Reserve officials and Consumer Sentiment data.
All U.S. factor strategies were in positive territory with S&P 500 High Beta (SPHB) and S&P 500 Pure Value (RPV) climbing 2.50%. S&P 500 Dividend (SPYD) and S&P 500 Momentum (SPMO) also gained more than 1.50%. Last week, all factors were up more than 4%. RPV led the way, jumping 8.06%. Developed ex-U.S. Markets (EFA) increased 1.07% on Friday as South Korea (EWY), Hong Kong (EWH), and the Netherlands (EWN) all rose more than 2.00%. Emerging Markets (EEM) also gained 2.04% with South Africa (EZA), Indonesia (EIDO), and Thailand (THD) all up at least 3.00%. China (MCHI) also increased 2.61%. Last week, EFA and EEM both gained more than 5%.
Sectors: Energy (XLE) declined 1.01% on Friday and was the only U.S. sector to post losses. XLE was dragged lower by Oil &Gas Exploration & Production (XOP, -79 bps) and Oil & Gas Equipment & Services (XES, -39 bps). Real Estate (XLRE) outperformed, climbing 2.36%. Materials (XLB) and Communication Services (XLC) also rose more than 1.50% while Consumer Discretionary (XLY) increased 1.41% and Financials (XLF) rose 1.32%. Technology (XLK) was also up 1.03% on the day. Internet (XWEB) and Biotech (XBI) were the best performing industries, both jumping more than 4%. Last week, all sectors gained more than 2.40%. XLRE was the top performing sector, rising 8.53%. XLF, XLY, and XLC all gained more 7%.
Themes: Global themes outperformed once again on Friday with all segments seeing positive returns and most rising more than 2.75%. Genomics (ARKG) rocketed 7.03% while Multi-Theme (ARKK) and Casinos & Gaming (BETZ) both increased more than 5%. Online Retail (IBUY), Disruptive Tech (ARKW), Biotech (SBIO), and 3D Printing (PRNT) all gained more than 4%. Last week, all segments were in the green and most segments increased more than 7%. Multi-Theme (ARKK) and Genomics (ARKG) were the best performing segments, climbing 18.59% and 17.09%, respectively. No segments sit in oversold territory following last week’s strong returns.
Commodities & Yields: At Friday’s close, the U.S. 2-Year Treasury Yield stood at 4.832% and the U.S. 10-Year Treasury Yield stood at 4.558%. U.S. Aggregate Bonds (AGG) rose 61 bps, 20+ Year Treasury Bonds (TLT) increased 68 bps, and the U.S. Dollar (UUP) fell 94 bps. Broad Commodities (DJP) inched lower by 6 bps as WTI Crude Oil (USO) dipped 1.75%, Silver (SLV) rose 1.68%, and Corn (CORN) increased 1.64%. USO is down more than 6% over the past month.
U.S. Size & Style Playbook
11.5.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.3.2023
Equities: As the U.S. 10-Year Treasury Yield continued to decline, U.S. markets pushed higher on Thursday with the S&P 500 (SPY) advancing 1.92%, the NASDAQ 100 (QQQ) climbing 1.81%, and the Dow Jones Industrial Average (DIA) gaining 1.72%. All three major averages are on pace to finish higher this week following three straight weeks of losses. Small-Caps (IJR) and Mid-Caps (IJH) were also up more than 2% yesterday. Investor confidence was lifted by sentiment that the Federal Reserve is done hiking rates. According to the CME FedWatch Tool, there is only a 14.6% probability of a rate increase at the December meeting, down from around 38% a month ago. The Labor Department reported Thursday that labor costs unexpectedly dropped 0.8% in Q3 against expectations of a 0.7% increase. A 4.7% rise in productivity offset the 3.9% increase in hourly compensation. A 4.7% rise in productivity offset the 3.9% increase in hourly compensation. Jobless claims also increased to 217K for the week versus the 214K estimate. Investors will now be looking towards Friday’s nonfarm payrolls report. On the earnings front, Starbucks topped earnings and revenue estimates and reported an 8% increase in same-store sales. Palantir, DoorDash, and Roku also posted strong returns yesterday following impressive quarterly results. After the close, Apple beat expectations on the top and bottom lines but recorded a 4th consecutive quarter of decline in sales. Block also reported earnings and revenue beats powered by strong revenue growth in Cash App and Square revenue.
All U.S. factor strategies were up more than 1.35% yesterday led with S&P 500 Dividend (SPYD, +3.03%) and S&P 500 High Beta (SPHB, +3.00%) leading the charge. S&P 500 Pure Growth (RPG) and S&P 500 Pure Value (RPV) also gained more than 2%. Developed ex-U.S. Markets (EFA, +2.04%) were bolstered by solid returns from South Korea (EWY, +3.20%), the Netherlands (EWN, +2.60%), France (EWQ, +2.36%), and Germany (EWG, +2.17%). Emerging Markets (EEM) also rose 1.75% on strength from Vietnam (VNM, +5.33%), Mexico (EWW, +4.35%), and South Africa (EZA, +3.25%).
Sectors: Real Estate (XLRE) and Energy (XLE) outpaced other U.S. sectors on Thursday, each climbing more than 3%. Consumer Discretionary (XLY, +2.61%), Financials (XLF, +2.36%), and Industrials (XLI, +2.06%) all had strong showings. Materials (XLB) and Utilities (XLU) each gained around 1.90% followed by Technology (XLK, +1.69%) and Health Care (XLV, +1.59%). Consumer Staples (XLP) was the worst performing segment on the day, adding 1.30%.
Themes: Global themes outperformed on Thursday with all segments registering positive returns and most gaining more than 2%. Multi-Theme (ARKK) rocketed 8.41% while Disruptive Tech (ARKW) surged 7.26% and Clean Energy (PBW) rose 6.12%. Genomics (ARKG), 3D Printing (PRNT), Cannabis (MJ), Industrial Revolution (ARKQ), Blockchain (BLOK), Online Retail (IBUY), and Wind (FAN) all gained more than 4%. Cybersecurity (HACK) was the worst performing segment, adding 90 bps. No segments currently sit in oversold territory following yesterday’s gains.
Commodities & Yields: The U.S. Dollar (UUP) fell 50 bps, U.S. Aggregate Bonds (AGG) rose 60 bps, and 20+ Year Treasury Bonds (TLT) jumped 2.28% yesterday. At Thursday’s close, the U.S. 2-Year Treasury Yield stood at 4.996% and the U.S. 10-Year Treasury Yield stood at 4.659%. Broad Commodities (DJP) increased 1.06% as Energy (DBE) gained 2.11% and Agriculture (DBA) advanced 1.18%.
Daily Note
11.2.2023
Equities: Equity markets posted gains on Wednesday as investors cheered the decision by the Federal Open Market Committee (FOMC) to keep rates unchanged at the target range of 5.25%-5.5%. The NASDAQ 100 (QQQ) climbed 1.74%, the S&P 500 (SPY) added 1.07%, and the Dow Jones Industrial Average (DIA) rose 67 bps. This was the 2nd straight meeting that the FOMC elected to hold, following a string of 11 rate hikes, including 4 in 2023. “The process of getting inflation sustainably down to 2% has a long way to go,” Fed Chair Jerome Powell said in remarks at a news conference. He stressed that the central bank hasn’t made any decisions yet for its December meeting and is not considering or even discussing rate reductions at this time. The Treasury Department announced plans Wednesday to auction $112 billion in debt next week to refund $102.2 billion of notes set to mature Nov. 15, raising more than $9 billion in extra funds. Separately, job openings increased slightly in September, indicating the U.S. labor market is still fairly tight, the Labor Department reported Wednesday. The latest Job Openings and Labor Turnover Survey (JOLTS), which the Federal Reserve watches closely, showed that openings fell 56K month-over-month to 9.55 million, which was slightly above estimates. The ratio of job openings to available workers now stands at 1.5 to 1, about where it was in August. The quits and hiring rates were unchanged while the layoffs rate ticked lower. Manufacturing activity in the U.S. contracted more than expected in October, according to a report Wednesday from the Institute for Supply Management. October marked the 12th consecutive sub-50 reading, which indicates contraction. AMD jumped nearly 10% Wednesday, a day after beating estimates on the top and bottom lines and issuing encouraging forward guidance. CVS also topped analyst expectations for Q3 thanks in part to strong sales from the company’s health services division. After the close, Airbnb reported stronger-than-expected revenue estimates on revenue but issued disappointing Q4 guidance. Qualcomm also beat expectations for sales and earnings, despite sizeable year-over-year declines, and gave a strong forecast for the current quarter.
All U.S. factor strategies were higher once again yesterday with S&P 500 Momentum (SPMO, +1.51%) and S&P 500 Growth (SPYG, +1.23%) seeing strong returns. S&P 500 Value (SPYV) also rose 89 bps while S&P 500 high Beta (SPHB) inched higher by just 2 bps. SPHB is down more than 19.50% over the past 3 months. Developed ex-U.S. Markets (EFA) gained another 94 bps on Wednesday as South Korea (EWY) jumped 2.37%, Australia (EWA) increased 1.83%, and Japan (EWJ) advanced 1.71%. Emerging Markets (EEM, +93 bps) were bolstered by Mexico (EWW, +3.10%) and Brazil (EWZ, +2.99%). China (MCHI) dipped 2 bps on the day.
Sectors: Energy (XLE) and Consumer Staples (XLP) were the only U.S. sectors in negative territory on Wednesday, declining 23 bps and 10 bps, respectively. Technology (XLK) was the best performing sector, climbing 1.93%, despite losses from Internet (XWEB, -2.06%). Communication Services (XLC, +1.47%), Consumer Discretionary (XLY, +1.24%), and Utilities (XLU, +1.14%) all posted solid gains while Financials (XLF) rose 65 bps and Real Estate (XLRE) added 51 bps. XLRE received a boost from Homebuilders (XHB), which advanced 3.07% on the day. XHB has fallen nearly 13% in the last 3 months but is up 23.30% year-to-date. All sectors are still trading below relative 50-day moving averages.
Themes: Mixed session for global themes yesterday with Cannabis (MJ, -2.43%) seeing the weakest returns. 3D Printing (PRNT) and Wind (FAN) each fell around 1.50% while Clean Energy (PBW) dropped 1.24% and Solar (TAN) declined 1.10%. 3D Printing (PRNT) and Solar (TAN) reentered oversold territory along with Industrial Revolution (ARKQ), which dipped 23 bps. Big Data (AIQ, +1.45%) and Blockchain (BLOK, +1.31%) outpaced other segments on the day. Digital Payments (IPAY), Connectivity (FIVG), Biotech (SBIO), and NextGen Transportation (DIRV) all gained more than 1% followed by Genomics (ARKG, +87 bps) and eSports & Video Games (ESPO, +70 bps). Blockchain (BLOK) is the only segment trading above its 50-day moving average.
Commodities & Yields: U.S. Aggregate Bonds (AGG) increased 1.10%, 20+ Year Treasury Bonds (TLT) advanced 2.16%, and the U.S. Dollar (UUP) added 3 bps on Wednesday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.971% and the U.S. 10-Year Treasury Yield stood at 4.791%. Broad Commodities (DJP) fell 46 bps as Industrial Metals (DBB, +93 bps) was the only broad-based sector in the green. Energy (DBE) slipped 49 bps as Natural Gas (UNG) declined 3.07%, Precious Metals (DBP) dropped 28 bps, and Agriculture (DBA) dipped 14 bps.
Global Thematic Playbook
11.1.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
11.1.2023
Equities: Ahead of Wednesday’s interest rate decision by the Federal Open Market Committee (FOMC), U.S. equity markets finished moderately higher yesterday. The S&P 500 (SPY) gained 63 bps, the NASDAQ 100 (QQQ) rose 48 bps, and the Dow Jones Industrial Average (DIA) added 38 bps. Despite Tuesday’s returns, all three major averages saw losses in October with SPY falling 2.17%, QQQ sinking 2.07%, and DIA declining 6.62%. October was the 3rd consecutive losing month for all three major averages. Year-to-date, DIA has increased just 1.32% while QQQ and SPY have climbed 32.34% and 10.58%, respectively. While the FOMC is widely expected to maintain rates at current levels on Wednesday, many investors will be monitoring the announcement on U.S. Treasury refunding, entailing the size of Treasury auctions as well as the duration mix of the debt that will be issued. Investors got a preview of the Treasury’s direction Monday, when the department said it will be auctioning off $776 billion of debt in the final quarter of the year. On the earnings front, JetBlue Airways plunged more than 10% to a near 12-year low on Tuesday after reporting weak quarterly results and issuing disappointing guidance for Q4. The airline is scheduled to appear in court to defend its acquisition of budget carrier Spirit Airlines, a purchase it sees as crucial to its future. BP was also down more than 4% yesterday after missing expectations for the quarter with profits falling sharply year-over-year. Pfizer reported mixed results while Caterpillar topped analysts’ estimates but issued weak forward guidance.
Value-tilted names outperformed once again on Tuesday as S&P 500 Enhanced Value (SPVU, +1.00%), S&P 500 Pure Value (RPV, +92 bps), and S&P 500 Value (SPYV, +90 bps) were the top performing U.S. factor strategies. S&P 500 Momentum (SPMO) underperformed, adding just 5 bps while S&P 500 Growth (SPYG) added 42 bps. In October, all factors were lower with S&P 500 High Beta (SPHB) declining 8.36% and RPV slipping 5.72%. S&P 500 Low Volatility (SPLV) dipped just 45 bps on the month. Emerging Markets (EEM) dropped 57 bps yesterday as Thailand (THD) and China (MCHI) both sank more than 1.50%. Developed ex-U.S. Markets (EFA) added 36 bps as Japan (EWJ) climbed 1.22% and South Korea (EWY) fell 1.79%. In October, EEM and EEM were both down around 3%. EWY dropped 6.77% on the month and has decreased nearly 19% over the past 3 months. MCHI was lower by 3.42% in October and is now down more than 11% year-to-date.
Sectors: All U.S. sectors registered positive returns on Tuesday with Real Estate (XLRE, +2.00%) outperforming. Financials (XLF) rose 1.09% and Utilities (XLU) increased 86 bps while Consumer Discretionary (XLY), Industrials (XLI), and Technology (XLK) were all up more than 70 bps. Energy (XLE, +33 bps) and Consumer Staples (XLP, +35 bps) were the worst performing sectors on the day. No sectors currently sit in oversold territory. Transportation (XTN), Metals & Mining (XME), and Oil & Gas Equipment & Services (XES) were the only industries in negative territory yesterday, all falling less than 1%. In October, Utilities (XLU) gained 1.29% and XLK inched higher by 5 bps. All other sectors declined more than 1%. XLE and XLY slipped more than 5% on the month while Health Care (XLV) and Materials (XLB) dropped more than 3%. Semiconductors (XSD) and Health Care Equipment (XHE) each plunged around 13% in October.
Themes: Cannabis (MJ) rocketed 7.06% on the last trading day in October, handily outpacing other global thematic segments. Genomics (ARKG), Multi-Theme (ARKK), Biotech (SBIO), Digital Infrastructure (SRVR), and Disruptive Tech (ARKW) all gained more than 2% while Clean Energy (PBW), Cyber Security (HACK), Cloud Computing (SKYY), Space (UFO), and Solar (TAN) all rose more than 1.50%. Advanced Materials (REMX) was the lone segment in the red on Tuesday, dipping 50 bps. No segments are trading at 52-week lows and Clean Energy (PBW) and NextGen Transportation )DRIV) are the only segments still sitting in oversold territory. October was another tough month for themes with most dropping more than 7%. Blockchain (BLOK) was the only segment to see gains, rising 3.41%. Cannabis (MJ) and Clean Energy (PBW) each plummeted more than 20% while Solar (TAN) fell 18.94% and Genomics (ARKG) dropped 17.37%.
Commodities & Yields: At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 5.071% and the U.S. 10-Year Treasury Yield stood at 4.875%. U.S. Aggregate Bonds (AGG) dipped 6 bps, 20+ Year Treasury Bonds (TLT) fell 49 bps, and the U.S. Dollar (UUP) rose 60 bps. TLT sank nearly 5.50% in October while UUP increased just over 1%. Broad Commodities (DJP) added 31 bps yesterday as Natural Gas (UNG) climbed 7.91%, WTI Crude Oil (USO) dropped 1.35%, and Silver (SLV) declined 1.69%. In October, USO decreased more than 7%, Gold (GLD) gained 7.37%, and Industrial Metals (DBB) slipped 4.44%. UNG increased almost 10% on the month but is still down 46.81% year-to-date.
U.S. Factor Playbook
10.31.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
10.31.2023
Equities: U.S. equity markets posted strong returns to kick off the week yesterday with the Dow Jones Industrial Average (DIA) advancing 1.55%, the S&P 500 (SPY) gaining 1.20%, and the NASDAQ 100 (QQQ) climbing 1.13%. Investors remain focused on the looming interest rate decision by the Federal Open Market Committee (FOMC) on Wednesday along with key jobs data and more earnings results. The committee is widely expected to keep rates at current levels this week and according to the CME FedWatch Tool, there is just a 24.7% probability of a rate hike at the final FOMC meeting this year on December 13,2 2023. After surging to highs not seen since 2007 last week, the U.S. 2-Year traded around 5.05% yesterday and the U.S. 10-Year lingered around 4.90%. On the earnings front, McDonald’s climbed nearly 2% on Monday after topping expectations on the top and bottom lines for Q3. Revenue rose 14% year-over-year for the quarter to $6.69 billion as global same-store sales grew 8.8% in the quarter. Apple is scheduled to report earnings results on Thursday. Tesla declined nearly 5% following news that Panasonic, a longtime partner and supplier to the EV maker, had reduced battery cell production in Japan during the period ending September 2023. Tesla is still up over 60% year-to-date.
All U.S. factor strategies finished higher on Monday with value-oriented pockets of the markets outperforming. S&P 500 Value (SPYV) and S&P 500 Pure Value (RPV) each gained more than 1.30% while S&P 500 Growth (SPYG) rose 1.02% and S&P 500 Pure Growth (RPG) added just 10 bps. SPYG has outpaced SPYV by around 10% thus far in 2023. Developed ex-U.S. Markets (EFA) climbed 1.28% yesterday as South Korea (EWY) jumped 2.40% and France (EWQ) advanced 1.66%. Germany (EWG), the U.K. (EWU), Switzerland (EWL), the Netherlands (EWN), and Australia (EWA) all rose more than 1.20% on the day. Emerging Markets (EEM, +1.04%) were boosted by Thailand (THD, +1.69%) and China (MCHI, +1.29%).
Sectors: Communication Services (XLC) climbed 2.06% on Monday, outgaining other U.S. sectors, all of which were in the green. Financials (XLF) and Consumer Staples (XLP) were also strong, gaining 1.78% and 1.56%, respectively. Industrials (XLI) added 1.24% while Technology (XLK) and Materials (XLB) were both up just over 1%. Energy (XLE) and Real Estate (XLRE) were the worst performing sectors, increasing just over 30 bps. All sectors are still trading below relative 50-day moving averages and most are trading below relative 200-day moving averages. Health Care (XLV, +56 bps) is the only sector still sitting in oversold territory. Semiconductors (XSD) declined more than 2% yesterday, nearing 52-week lows. Oil & Gas Equipment & Services (XES, -57 bps) Health Care Equipment (XHE, -51 bps), and Oil & Gas Exploration & Production (XOP, -35 bps) were the only other industries to see losses.
Themes: Global themes bounced back from a rough week last week with most segments registering positive returns yesterday. Biotech (SBIO, +2.27%) and Casinos & Gaming (BETZ, +2.01%) saw the strongest returns followed by Blockchain (BLOK, +1.84%), Evolving Consumer (SOCL, +1.79%), and 3D Printing (PRNT, +1.55%). Space (UFO), Online Retail (IBUY), FinTech (FINX), Disruptive Tech (ARKW), and Big Data (AIQ) all gained more than 1.30% for the day. Advanced Materials (REMX) and Clean Energy (PBW) underperformed, falling 1.29% and 93 bps, respectively. Cannabis (MJ) dipped 37 bps, NextGen Transportation (DRIV) declined 29 bps, and Industrial Revolution (ARKQ) inched lower by 11 bps. Clean Energy (PBW) and Cannabis (MJ) are the only segments trading at 52-week lows. 10 segments still sit in oversold territory.
Commodities & Yields: Broad Commodities (DJP) slipped 1.29% on Monday, pulled lower by Energy (DBE, -2.55%). WTI Crude Oil (USO) sank 2.95% while Gasoline (UGA) and Natural Gas (UNG) were both down more than 3%. Gold (GLD) also fell 56 bps while Silver (SLV) rose 76 bps. The U.S. Dollar (UUP) slied 40 bps, U.S. Aggregate Bonds (AGG) declined 24 bps, and Senior Loans (BKLN) added 14 bps. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 5.039% and the U.S. 10-Year Treasury Yield stood at 4.877%.
U.S. Sector & Industry Playbook
10.31.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
10.30.2023
Equities: Mixed session for U.S. equity markets on Friday as investors digested fresh earnings results and the Personal Consumption Expenditures (PCE) report. The tech-heavy NASDAQ 100 (QQQ) gained 48 bps while the Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) fell 1.11% and 45 bps, respectively. All three major averages were down more than 2% last week. SPY and DIA both entered oversold territory. The PCE index increased 0.4% month-over-month and 3.4% year-over-year in September. Amazon climbed more than 6% after the e-commerce giant topped analysts’ expectations for revenue and earnings in the third quarter. The core PCE price index, which excludes volatile food and energy prices, increased 0.3% for the month, in line with estimates and above the 0.1% level for August. Even with the pickup in prices, personal spending kept up and then some, rising 0.7%, which was better than the 0.5% forecast. Personal income rose 0.3%, one-tenth of a percentage point below the estimate. This week, investors will be monitoring Consumer Confidence data, the Job Openings & Labor Turnover Results Survey (JOLTS) figures, and the Employment Situation results. Additionally, the Federal Open Market Committee (FOMC) meeting begins on Tuesday with the interest rate decision on Wednesday. The committee is widely expected to keep rates unchanged.
S&P 500 Enhanced Value (SPVU) and S&P 500 Dividend (SPYD) were the worst performing U.S. factor strategies on Friday, each dropping more than 2%. All factors finished in the red for the day with S&P 500 Pure Growth (RPG) and S&P 500 Pure Value (RPV) both declining around 1.10%. Last week, all factors posted losses. S&P 500 High Beta (SPHB) and S&P 500 Quality (SPHQ) sunk more than 3.50% on the week. Developed ex-U.S. Markets (EFA) dipped 30 bps as France (EWQ) and the U.K. (EWU) both slipped more than 1%. Emerging Markets (EEM, -8 bps) were impacted by losses from Brazil (EWZ, -1.84%). Last week, EFA decreased 1.10% and EEM was down 71 bps.
Sectors: Consumer Discretionary (XLY) and Technology (XLK) were the only U.S. sectors to see gains on Friday, rising 1.05% and 58 bps, respectively. Energy (XLE) underperformed once again, slipping 2.40% on the day. Utilities (XLU) and Financials (XLF) both fell more than 1.80% while Health Care (XLV) dropped 1.69% and Real Estate (XLRE) dipped 1.58%. Consumer Staples (XLP) was also down 1.36% and Industrials (XLI) sank 88 bps. XLV and XLI hit fresh 52-week lows. XLV and XLF currently sit in oversold territory. Last week, XLU was the only sector to register positive returns, gaining 1.21%. XLE plunged 6.24% followed by Communication Services (XLC), which slipped 5.16%.
Themes: Most global thematic segments posted losses on Friday with Solar (TAN, -4.88%) Cannabis (MJ, -3.91%), Clean Energy (PBW, -3.24%), and Genomics (ARKG, -3.22%) falling the furthest. Biotech (SBIO) also declined 2.68% while FinTech (FINX), Multi-Theme (ARKK), Digital Payments (IPAY), and Space (UFO) all dropping at least 1.50%. Big Data (AIQ) and Connectivity (FIVG) were both up around 65 bps while Advanced Materials (REMX) and Cloud Computing (SKYY) both rose more than 40 bps. Last week, Blockchain (BLOK) outperformed, climbing 3.34%. Digital Infrastructure (SRVR) and Wind (FAN) both gained more than 1%. MJ plummeted more than 10% on the week and 3D Printing (PRNT) dropped 7.38%.
Commodities & Yields: The U.S. Dollar (UUP) dipped 13 bps, U.S. Aggregate Bonds (AGG) inched lower by 3 bps, and 20+ Year Treasury Bonds (TLT) declined 42 bps on Friday. At Friday’s closing bell, the U.S. 2-Year Treasury Yield stood at 5.012% and the U.S. 10-Year Treasury Yield stood at 4.845%. Broad Commodities (DJP) gained 1.12% as WTI Crude Oil (USO) increased 1.91%, Gasoline (UGA) climbed 2.34%, Gold (GLD) rose 1.16%, and Industrial Metals (DBB) advanced 1.38%. UNG has jumped more than 7% over the past month.
U.S. Size & Style Playbook
10.29.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
10.27.2023
Equities: U.S. equity markets closed sharply lower yesterday as investor confidence was shaken by mixed earnings results from mega-cap tech companies. The NASDAQ 100 (QQQ) fell another 1.91%, the S&P 500 (SPY) declined 1.20%, and the Dow Jones Industrial Average (DIA) dipped 77 bps. All three major averages are on pace for another losing week this week. Small-Caps (IJR, +26 bps) and Mid-Caps (IJH, +47 bps) outperformed yesterday. After reporting strong results after the close on Wednesday, Meta dropped nearly 4% yeasterday after issuing cautious forward guidance stemming from the Hamas-Israel war. Chipotle Mexican Grill beat earnings estimates but posted revenue figures that were in line with expectations. United Parcel Service missed on revenue estimates but beat on earnings for the 3rd quarter. The company also slashed its forward guidance, which led to a 6% drop in share price for the day. Ford Motor declined more than 4% on Thursday after missing expectations on the top and bottom lines for Q3 and withdrawing its guidance for the year. After the closing bell, Amazon handily topped analyst estimates for revenue and earnings for the third quarter with revenue jumping 13% year-over-year for the quarter. Separately, the Commerce Department reported that gross domestic product (GDP), a measure of all goods and services produced in the U.S., rose at a 4.9% annualized pace in the third quarter, ahead of the 4.7% estimate. The sharp increase came due to contributions from consumer spending, increased inventories, exports, residential investment, and government spending. On Friday, investors will be looking towards the Personal Consumption Expenditures report, a closely watched inflation gauge.
S&P 500 Dividend (SPYD, +45 bps) and S&P 500 Enhanced Value (SPVU, +39 bps) were the only U.S. factor strategies to register positive returns on Thursday. S&P 500 Quality (SPHQ) and S&P 500 Growth (SPYG) both retreated around 1.60% while S&P 500 Momentum (SPMO) dipped 1.22%. S&P 500 Pure Value (RPV) declined 39 bps to new 52-week lows. Emerging Markets (EEM) slipped 49 bps as Indonesia (EIDO) and Thailand (THD) each fell more than 2%. Mexico (EWWW, +2.13%) and Brazil (EWZ, +1.91%) were strong on the day. Developed ex-U.S. Markets (EFA, -72 bps) were dragged lower by South Korea (EWY, -2.16%), Japan (EWJ, -1.36%), and Germany (EWG, -1.23%). EWY is down more than 18% in the past 3 months and sits in oversold territory.
Sectors: Just 3 of the 11 U.S. sectors posted gains on Thursday, led by Real Estate (XLRE, +2.11%). Utilities (XLU) and Materials (XLB) rose 86 bps and 70 bps, respectively. Communication Services (XLC, -2.18%) and Technology (XLK, -1.91%) underperformed. XLC was impacted by Meta's losses (24.61% weight). Consumer Discretionary (XLY) declined 1.56% yesterday and entered oversold territory. XLY has been the worst performing sector in the last month, sinking 6.88%. Health Care (XLV, -99 bps), Energy (XLE, -78 bps), and Consumer Staples (XLP, -65 bps) were also weak on Thursday. On the industry level, Regional Banks (KRE) and Banks (KBE) both jumped more than 2% while Oil & Gas Equipment & Services (XES) decreased 2.17%.
Themes: Digital Infrastructure (SRVR) surged 3.85% on Thursday, handily outpacing other global thematic segments. American Tower (15.36% weight in SRVR) climbed more than 8% yesterday after reporting strong revenue results for the quarter and lifting forward guidance. Solar (TAN, +96 bps) and Water (PHO, +46 bps) were the only other segments to gain more than 15 bps on the day. 3D Printing (PRNT, -2.81%), Cannabis (MJ, -2.43%), and Disruptive Tech (ARKW, -2.10%) saw the worst returns followed closely by Blockchain (BLOK, -1.93%). PRNT and MJ both hit new 52-week lows. Big Data (AIQ), eSports & Video Games (ESPO), Multi-Theme (ARKK), and Cloud Computing (SKYY) were all down around 1.30%. All 28 segments are trading below relative 50-day moving averages and Cyber Security (HACK) is the only segment trading abvoe its 200-day moving average.
Commodities & Yields: The U.S. Dollar (UUP) added 23 bps, U.S. Aggregate Bonds (AGG) rose 67 bps, and 20+ Year Treasury Bonds gained 1.53% yesterday. At the close, the U.S. 2-Year Treasury Yield stood at 5.046% and the U.S. 10-Year Treasury Yield stood at 4.849%. BRoad Commodities (DJP, -31 bps) were pulled lower by WTI Crude Oil (USO, -2.00%), Gasoline (UGA, -84 bps), and Silver (SLV, -43 bps).
Daily Note
10.25.2023
Equities: As investors weighed fresh earnings results and the latest movements from treasury yields, U.S. equity markets registered positive returns on Tuesday. The NASDAQ 100 (QQQ) advanced 97 bps, the S&P 500 (SPY) rose 75 bps, and the Dow Jones Industrial Average (DIA) gained 64 bps. Spotify surged around 10% yesterday after beating quarterly estimates for earnings, revenue, and premium subscribers. The audio streaming company also reported a surprise profit for Q3, its first quarterly profit in a year and a half. Verizon climbed more than 9%, its best daily performance in nearly 15 years, after topping earnings and revenue expectations. Coca-Cola added more than 3% on the day after beating estimates on the top and bottom lines while General Motors fell almost 2.50% despite posting better-than-expected quarterly results. The auto company lower its forward guidance amid the impacts of the United Auto Workers union strike. After the close, Alphabet posted results above estimates and reported 11% year-over-year revenue growth in the third quarter. However, its cloud business missed revenue expectations. Microsoft also beat earnings and revenue expectations with revenue increasing nearly 13% year-over-year for the quarter. Microsoft’s cloud unit saw revenue increase more than 19% year-over-year. Treasury yields were relatively steady yesterday with the U.S. 10-Year hovering around 4.85%. On Wednesday, investors will be focused on more earnings results along with New Home Sales data and a speech from Fed Chair Jerome Powell.
All U.S. factor strategies were in the green yesterday with S&P 500 Dividend (SPYD) and S&P 500 Minimum Variance (SPMV) gaining more than 1%. S&P 500 Low Volatility (SPLV) also rose 94 bps while S&P 500 Pure Growth (RPG) added just 27 bps. Developed ex-U.S. Markets (EFA, +57 bps) received a boost from Hong Kong (EWH, +1.67%), South Korea (EWY, +1.31%), Australia (EWA, +1.21%), and the Netherlands (EWN, +1.14%). Emerging Markets (EEM) advanced 1.28% as China (MCHI) jumped 2.87%. Thailand (THD) and Indonesia (EIDO) were also up at least 1.50%.
Sectors: All U.S. sectors posted gains on Tuesday, except for Energy (XLE), which slumped 1.41%. Utilities (XLU) was the top performing sector, climbing 2.57%. Real Estate (XLRE), Communication Services (XLC), Materials (XLB), and Consumer Discretionary (XLY) were all higher by more than 1%. XLC sits just 1.67% from 52-week highs and is now trading 9.55% above is 200-day moving average. Consumer Staples (XLP) rose 85 bps, Industrials (XLI) advanced 75 bps, and Technology (XLK) and Financials (XLF) each gained 69 bps. On the industry level, Biotech (XBI, +2.49%) and Software & Services (XSW, +2.03%) outperformed. No industries declined more than 80 bps.
Themes: Water (PHO) dipped 24 bps yesterday and was the lone global thematic segment to see losses. Blockchain (BLOK) jumped another 4.94% as the price of Bitcoin pushed higher. Advanced Materials (REMX) and Cannabis (MJ) both gained more than 4% while Disruptive Tech (ARKW) and Evolving Consumer (SOCL) rose more than 3%. Multi-Theme (ARKK), Genomics (ARKG), Wind (FAN), Biotech (SBIO), and eSports & Video Games (ESPO) all increased more than 2% on the day. Just 4 segments still sit in oversold territory: Clean Energy (PBW), Smart Infrastructure (GRID), Robotics & AI (ROBO), and 3D Printing (PRNT).
Commodities & Yields: Broad Commodities (DJP) dipped 20 bps on Tuesday with WTI Crude Oil (USO) slipping 2.48%, Gasoline (UGA) dropping 2.58%, and Copper (CPER) rising 1.35%. U.S. Aggregate Bonds (AGG) were up 36 bps, 20+ Year Treasury Bonds (TLT) increased 1.32%, and the U.S. Dollar (UUP) added 57 bps. At the close, the U.S. 2-Year Treasury Yield stood at 5.071% and the U.S. 10-Year Treasury Yield stood at 4.840%.
Global Thematic Playbook
10.25.2023
An overview of the Global Thematic ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
U.S. Factor Playbook
10.24.2023
An overview of the U.S. Factor ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
10.24.2023
Equities: Mixed session for U.S. equities yesterday following another week of losses last week. The tech-oriented NASDAQ 100 (QQQ) gained 30 bps while the Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) declined 56 bps and 17 bps, respectively. Monday marked the 4th straight day of losses for DIA and SPY. DIA and SPY are each trading below relative 50-day and 200-day moving averages and are approaching oversold territory. Small-Caps (IJR) and Mid-Caps (IJH) were also down more than 90 bps yesterday and hit fresh 52-week highs. Treasury yields climbed higher early in the session before falling sharply later in the day. The U.S. 10-Year topped 5% briefly on Monday before falling back below 4.90%. Chevron dropped almost 4% on the day after announcing plans to purchase Hess Corp in an all-stock deal worth $53 billion. The acquisition follows Exxon Mobil’s bid $60 billion for Pioneer Natural Resources earlier this month. All eyes are on earnings results from Alphabet, Microsoft, Snap, and Spotify slated for Tuesday.
S&P 500 Momentum (SPMO) added 69 bps on Monday and was the only U.S. factor strategy in positive territory. S&P 500 Dividend (SPYD, -1.10%), S&P 500 Pure Growth (RPG, -1.00%), and S&P 500 Pure Value (RPV, -86 bps) were among the worst performing factors. SPYD and RPV are trading at 52-week lows and RPV sits in oversold territory. Developed ex-U.S. Markets (EFA) gained 8 bps with the Netherlands (EWN) and France (EWQ) both climbing more than 75 bps. Switzerland (EWL) dipped 40 bps. Emerging Markets (EEM) slipped 8 bps on weakness from Indonesia (EIDO, -1.29%), India (INDA, -82 bps), and Vietnam (VNM, -63 bps).
Sectors: Eight of the 11 U.S. sectors finished lower on Monday with Energy (XLE, -1.62%) falling the furthest. Materials (XLB) declined 1.12% while Real Estate (XLRE) and Utilities (XLU) both dropped around 85 bps. XLB and XLRE hit new new 52-week lows. Health Care (XLV) and Financials (XLF) fell more than 60 bps. XLV was impacted by Biotech (XBI), which decreased 2.18% to fresh 52-week lows. Communication Services (XLC) saw the strongest returns amongst sectors, advancing 53 bps. XLC is the only sector trading above its 50-day and 200-day moving average. Consumer Discretionary (XLY) and Technology (XLK) each added 12 bps yesterday.
Themes: Global themes were split yesterday led by Blockchain (BLOK, +2.77%). Casinos & Gaming (BETZ) and Evolving Consumer (SOCL) were both up around 1% while Disruptive Tech (ARKW) added 58 bps. Cannabis (MJ) and Advanced Materials (REMX) underperformed, sinking 2.31% and 2.25%, respectively. Clean Energy (PBW, -1.70%), Biotech (SBIO, -1.66%), 3D Printing (PRNT, -1.49%), and Space (UFO, -1.42%) were also weak. Cyber Security (HACK) fell 86 bps after Okta (4.16% weight) plunged another 8% following a data breach last week. 9 segments are trading at 52-week lows and 11 sit in oversold territory.
Commodities & Yields: U.S. Aggregate Bonds (AGG) increased 39 bps, 20+ Year Treasury Bonds (TLT) rose 1.20%, and the U.S. Dollar (UUP) slipped 50 bps yesterday. At Monday’s close, the U.S. 2-Year Treasury Yield stood at 5.052% and the U.S. 10-Year Treasury Yield stood at 4.850%. Broad Commodities (DJP) fell 92 bps, pulled lower by Energy (DBE, -1.74%). WTI Crude Oil (USO) sank 2.24%, Gasoline (UGA) dropped 1.77%, and Silver (SLV) declined 1.64%.
U.S. Sector & Industry Playbook
10.23.2023
An overview of the U.S. Sector ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
10.23.2023
Equities: As the U.S. 10-Year Treasury Yield topped 2007 for the first time since 2007, U.S. markets posted losses once again on Friday. The NASDAQ 100 (QQQ) fell 1.49%, the S&P 500 (SPY) slipped 1.23%, and the Dow Jones Industrial Average (DIA) declined 82 bps. All three major averages finished lower last week with QQQ retreating 2.92%, SPY sinking 2.39%, and DIA dipping 1.57%. SPY and DIA are each down around 4% in the past month while QQQ is down 2.73%. On Friday, American Express dipped more than 5% after beating earnings expectations, but revenue was about in line with estimates. Regions Financial plunged more than 12% on the day after reporting weak earnings figures. This week, investors will be looking out for a slew of earnings reports as well as New Home Sales data, Durable Goods Orders figures, Gross Domestic Product (GDP) results, the the closely watched Personal Consumption Expenditures (PCE) report. On Tuesday, General Motoes, Alphabet, Microsoft , and Coca-Cola are scheduled to report quarterly earnings figures followed by Meta, IBM, and Boeing on Wednesday and Amazon, Intel, Ford, and Chipotle Mexican Grill on Thursday.
S&P 500 Low Volatility (SPLV, -63 bps) was the only U.S. factor strategy to drop less than 1% on Friday. SPLV was also the best performing factor last week, slipping just 97 bps. Meanwhile, S&P 500 High Beta (SPHB) declined 1.98% on Friday and nearly 4% last week. Developed ex-U.S. Markets (EFA) sank 89 bps on Friday as Australia (EWA), South Korea (EWY), the U.K., the Netherlands (EWN), and Germany (EWG) all fell more than 1%. Emerging Markets (EEM, -1.21%) were impacted by losses from Thailand (THD, -2.54%), China (MCHI, -1.80%), and South Africa (EZA, -1.51%).
Sectors: All U.S. sectors were in the red on Friday with Technology (XLK, -1.69%) and Energy (XLE, -1.68%) seeing the weakest returns. Consumer Discretionary (XLY) and Financials (XLF) dropped more than 1.50% while Materials (XLB) sank 1.21%. XLF was dragged lower by Regional Banks (KRE, -4.00%) and Banks (KBE, -3.51%). Utilities (XLU), Industrials (XLI), and Communication Services (XLC) were all down around 1%. Real Estate (XLRE) declined 52 bps to new 52-week lows. Last week, XLE gained 75 bps and Consumer Staples (XLP) added 70 bps. All other sectors were lower with XLRE and XLY both retreating more than 4.50%. XLF and XLI were also down around 3% last week.
Themes: Solar (TAN) was the worst performing thematic segment on Friday, plummeting 6.05% on Friday following weak earnings results from SolarEdge (7.05% weight). All other segments registered negative returns with Clean Energy (PBW) falling 3.92% and Cloud Computing (SKYY), Cannabis (MJ), Smart Infrastructure (GRID), and Cyber Security (HACK) all sinking more than 2%. Blockchain (BLOK) inched lower by just 10 bps and was the best performer on the day. BLOK was the only segment to see gains last week, rising 72 bps. TAN and PBW both declined more than 9% on the week and Advanced Materials (REMX) slid 8.41%. 11 of the 28 segments currently sit in oversold territory.
Commodities & Yields: AThe U.S. Dollar (UUP) inched higher by 3 bps, U.S. Aggreaget Bonds (AGG) rose 36 bps, and 20+ Year Treasury Bonds (TLT) increased 57 bps on Friday. At the close, the U.S. 2-Year Treasury Yield stood at 5.084% and the U.S. 10-Year Treasury Yield stood at 4.924%. Broad Commodities (DJP) declined 64 bps as Natural Gas (UNG), WTI Crude Oil (USO), and Copper (CPER) all dropped more than 1%.
U.S. Size & Style Playbook
10.22.2023
An overview of the broad U.S. Size & Style ETF landscape - Performance, Flows, Valuations, Earnings, & Technicals.
Daily Note
10.20.2023
Equities: U.S. equity markets finished lower once again as investors weighed comments from Fed Chairman Jerome Powell, fresh earnings results, and elevated treasury yields. The tech-heavy NASDAQ 100 (QQQ) declined 94 bps, the S&P 500 (SPY) fell 88 bps, and the Dow Jones Industrial Average (DIA) dropped 75 bps. All three major averages are on pace to end the week lower. Small-Caps (IJR) and Mid-Caps (IJH) were each down more than 1.50% yesterday. In a widely anticipated speech delivered to the Economic Club of New York, Powell acknowledged recent signs of cooling inflation but said inflation was still too high. He did not commit to a specific rate policy moving forward. Following the remarks, there is just a 0.4% chance for a rate hike at the November Federal Open Market Committee (FOMC) meeting and a 24.9% chance of a rate hike at the December meeting, according to the CME FedWatch tool. Treasury yields remained elevated with the U.S. 10-Year topping out at 4.996% intraday Thursday. The last time the 10-Year rose above the 5% level was 2007. Earnings wise, Netflix soared 16.05% yesterday after topping estimates after the close on Wednesday while Tesla sank more than 9% following disappointing quarterly results. AT&T gained more than 6% on Thursday after beating expectations for Q3, Blackstone reported weaker-than-expected quarterly earnings figures, and American Airlines also missed estimates on the top and bottom lines.
S&P 500 High Beta (SPHB) was the worst performing U.S. factor strategy for the 2nd consecutive session yesterday, slipping 1.74%. S&P 500 Pure Growth (RPG), S&P 500 Pure Value (RPV), and S&P 500 Dividend (SPYD) all sank more than 1.35% on the day. All factors were down with most falling more than 90 bps. Developed ex-U.S. Markets (EFA) dropped 89 bps as Hong Kong (EWH), South Korea (EWY), Switzerland (EWL), and the U.K. (EWU) all declined more than 1%. Emerging Markets (EEM, -59 bps) were dragged lower by Indonesia (EIDO,-2.25), China (MCHI, -1.35%), and Thailand (THD, -1.00%).
Sectors: All U.S. sectors posted losses with Consumer Discretionary (XLY) and Real Estate (XLRE) both falling around 2.50%. XLRE is trading just 24 bps from 52-week lows and is nearing oversold territory. Financials (XLF) and Materials (XLB) were also weak, sinking 1.33% and 1.17%, respectively. Utilities (XLU) dropped 1.00%, Health Care (XLV) slipped 99 bps, and Industrials (XLI) declined 92 bps. Communication Services (XLC) was the top performing sector on the day, dipping just 10 bps. XLC was boosted by excellent returns from Netflix (3.50% weight). All industries were also in the red.
Themes: All global themes were in negative territory once again with Advanced Materials (REMX, -3.41%) and Clean Energy (PBW, -3.36%) falling the furthest. Digital Infrastructure (TAN) and Solar (TAN) were both lower by more than 3% while Genomics (ARKG), Industrial Revolution (ARKQ), NextGen Transportation (DRIV), and Multi-Theme (ARKK) all dropped more than 2%. Wind (FAN) dipped just 18 bps on the day and led other global thematic segments. 8 segments are currently trading at 52-week lows and 4 sit in oversold territory. Cyber Security (HACK), which fell 98 bps yesterday, is the only segment trading above its 50-day moving average.
Commodities & Yields: At Thursday’s closing bell, the U.S. 2-Year Treasury Yield stood at 5.163% and the U.S. 10-Year Treasury Yield stood at 4.991%. The U.S. Dollar (UUP) dipped 30 bps, U.S. Aggregate Bonds (AGG) decreased 38 bps, and 20+ Year Treasury Bonds (TLT) dropped another 2.05%. TLT is down more than 10.5% over the past month. Broad Commodities (DJP) added 64 bps yesterday with all broad-based sectors in the green. Energy (DBE) and Precious Metals (DBP) both climbed more than 1%.
Daily Note
10.19.2023
Equities: Amid surging treasury yields, U.S. equity markets were sharply lower on Wednesday with the NASDAQ 100 (QQQ) and the S&P 500 (SPY) both falling just over 1.30% and the Dow Jones Industrial Average (DIA) declining 99 bps. Small-Caps (IJR, -1.91%) and Mid-Caps (IJH, -2.22%) were also weak on the day. The U.S. 10-Year climbed above 4.90% yesterday, the first time since 2007, and the U.S. 2-Year rose above 5.20%, nearing levels not seen since 2006. Meanwhile, the average rate on the popular 30-year fixed mortgage rate just hit 8%, the highest level since 2000. Housing starts accelerated in September, though at a slower than expected pace, while building permits fell, but by less than expected, the Commerce Department reported Wednesday. According to the Mortgage Bankers Association, mortgage demand dropped to the lowest level since 1995 last week. On the earnings front, United Airlines slipped nearly 10% yesterday after reporting weaker-than-expected earnings results. Rising jet fuel prices and a recent halt to the carrier’s Tel Aviv flights impacted profits on the quarter. Morgan Stanley declined more than 7% on the day following disappointing results from the firm’s wealth management division. Procter & Gamble topped expectations on the top and bottom lines, helped by higher prices for P&G’s products. After the close, Netflix reported a boost in subscriber growth and beat earnings estimates. Tesla also missed on both earnings and revenue for the first time since its Q2 2019 report in July 2019. Federal Reserve Chair Jerome Powell is set to deliver what could be a key policy address Thursday afternoon in New York and investors will also be looking toward Existing Home Sales data.
All U.S. factor strategies posted losses yesterday with most declining more than 1%. S&P 500 High Beta (SPHB, -2.37%) was hit the hardest followed by S&P 500 Dividend (SPYD, -1.70%) and S&P 500 Momentum (SPMO, -1.62%). S&P 500 Pure Value (RPV) also sank 1.50% and is nearing 52-week lows. Emerging Markets (EEM) dropped 1.52% on Wednesday on weakness from South Africa (EZA, -2.59%), Taiwan (EWT, -1.99%), and Mexico (EWW). Brazil (EWZ) and China (MCHI) were both down more than 1.70% on the day. Developed ex-U.S. Markets (EFA, -1.74%) was dragged lower by the Netherlands (EWN, -2.49%), the U.K. (EWU, -1.81%), France (EWQ, -1.74%), and Germany (EWG, -1.74%).
Sectors: Energy (XLE) and Consumer Staples (XLP) added 91 bps and 37 bps, respectively, yesterday and were the only U.S. sectors in the green. Materials (XLB) was the worst performer, sinking 2.59%. Industrials (XLI), Consumer Discretionary (XLY), and Real Estate (XLRE) all declined more than 2% while Communication Services (XLC) and Financials (XLF) both dropped more than 1.70%. Over the past 3 months, XLY and XLRE has retreated more than 10%. XLY is still up over 23% year-to-date. Technology (XLK) dipped 1.03% yesterday while Health Care (XLV) and Utilities (XLU) each dropped 87 bps. All industries were in the red, except for Oil & Gas Exploration & Production (XOP, +75 bps). Transportation (XTN) and Homebuilders (XHB) were both down more than 3%.
Themes: All global thematic segments saw negative returns yesterday with most sinking more than 2.50%. Cannabis (MJ) plummeted 7.12% on the day and is now up just 2.07% over the past 3-month period. Clean Energy (PBW) sank 5.15% while Advanced Materials (REMX), Genomics (ARKG), and Multi-Theme (ARKK) all fell around 4.50%. PBW, REMX, and ARKG each hit new 52-week lows. Disruptive Tech (ARKW), Smart Infrastructure (GRID), Water (PHO), Casinos & Gaming (BETZ), NextGen Transportation (DRIV), and Evolving Consumer (SOCL) all declined more than 3% on Wednesday. 3D Printing (PRNT, -2.92%) and Biotech (SBIO, -2.51%) also slipped to fresh 52-week lows. Cyber Security (HACK) dipped 90 bps and was the top performing segment.
Commodities & Yields: Broad Commodities (DJP) climbed 96 bps on Wednesday, lifted by Gasoline (UGA, +2.39%), Gold (GLD, +1.45%), and Wheat (WEAT, +1.56%). U.S. Aggregate Bonds (AGG) dipped 47 bps, 20+ Year Treasury Bonds (TLT) fell 88 bps, and the U.S. Dollar (UUP) added 37 bps. At the close, the U.S. 2-Year Treasury Yield stood at 5.229% and the U.S. 10-Year Treasury Yield stood at 4.934%.
Daily Note
10.18.2023
Equities: On the heels of fresh economic data and corporate earnings results, the Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) were relatively flat on Tuesday while the NASDAQ 100 (QQQ) declined 33 bps. Retail sales increased 0.7% month-over-month and 3.8% year-over-year in September, both above consensus estimates. The numbers are not adjusted for inflation, so they indicate that consumers more than kept up with price increases. The Consumer Price Index, which was released last week, showed headline inflation increased 0.4% in September. The results caused treasury yields to climb with the U.S. 2-Year rising above 5.20% and the U.S. 10-Year nearing 4.85% intraday yesterday. The National Association of Home Builders Housing Market Index dropped 4 points to 40 in October, the lowest level since January. Anything below 50 is considered negative and October is the 3rd straight monthly decline in builder confidence. Mortgage rates, which sit around 23-year highs were the root cause of the decline in sentiment, according to builders. The average rate on the 30-year fixed mortgage remains above 7% causing affordability to remain near record lows. On the earnings front, Goldman Sachs topped earnings and revenue estimates for the 3rd quarter following strong trading revenue. Bank of America also beat expectations on the top and bottom lines with stronger-than-expected interest income. Bank of New York Mellon climbed nearly 4% after beating analyst forecasts in the quarter. Investors will be monitoring more earnings results on Wednesday along with Housing Starts & Permits figures.
U.S. factor strategies were mixed on Tuesday with S&P 500 Momentum (SPMO) slipping 35 bps, S&P 500 Enhanced Value (SPVU) gaining 1.01%, and S&P 500 Dividend (SPYD) adding 91 bps. Emerging Markets (EEM) declined 26 bps as Vietnam (VNM) dropped 2.81%, Taiwan (EWT) retreated 1.05%, and Mexico (EWW) sank 98 bps. China (MCHI) was also down 72 bps. Developed ex-U.S. Markets (EFA) added just 6 bps with Switzerland (EWL) dipping 68 bps, Australia (EWA) climbing 42 bps, and the U.K. (EWU) rising 28 bps.
Sectors: Energy (XLE) and Materials (XLB) outperformed other U.S. sectors yesterday, advancing 1.04% and 98 bps, respectively. XLE benefitted from solid returns from Oil & Gas Equipment & Services (XES, +2.01%) while XLB was lifted by Metals & Mining (XME, +2.10%). Financials (XLF) and Consumer Staples (XLP) both rose more than 40 bps. XLF received a boost from Regional Banks (KRE) and Banks (KBE), which both advanced around 2%. Communication Services (XLC) and Industrials (XLI) both gained more than 30 bps and XLC now sits 61 bps from 52-week highs. Real Estate (XLRE) underperformed, sinking 52 bps. Technology (XLK) dropped 46 bps, Utilities (XLU) slipped 27 bps, and Utilities (XLU) decreased 27 bps.
Themes: Most global thematic segments finished in positive territory yesterday, led by Clean Energy (PBW, +2.00%) and Cannabis (MJ, +1.81%). PBW is still down more than 30% over the past 3 months. Multi-Theme (ARKK) and Disruptive Tech (ARKW) each increased more than 1.60% on Tuesday followed by Solar (TAN, +1.45%). ARKW exited oversold territory. Genomics (ARKG), Digital Payments (IPAY), Blockchain (BLOK), Industrial Revolution (ARKQ), and FinTech (FINX) were all up at least 1%. Digital Infrastructure (SRVR) saw the weakest returns, declining 1.31%. Connectivity (FIVG) fell 99 bps and Evolving Consumer (SOCL) dipped 42 bps. No segments sit in oversold territory but most are still trading below relative 50-day and 200-day moving averages.
Commodities & Yields: The U.S. Dollar (UUP) inched higher by 3 bps, U.S. Aggregate Bonds (AGG) fell 72 bps, and 20+ Year Treasury Bonds (TLT) declined 1.10% yesterday. At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 5.216% and the U.S. 10-Year Treasury Yield stood at 4.838%. Broad Commodities (DJP) added just 6 bps as Natural Gas (UNG) slipped 1.37% and Silver (SLV) jumped 1.16%.