The Daily Note Archives
Daily Note
3.18.2024
Equities: On Friday, U.S. equity markets were lower once again with the NASDAQ 100 (QQQ) sinking 1.19%, the S&P 500 (SPY) falling 68 bps, and the Dow Jones Industrial Average (DIA) dropped 55 bps. Last week was another losing week for all three major averages. QQQ declined 1.16%, SPY was down 6 bps, and DIA dipped 1 bps. The Russell 2000 (IWM) added 19 bps on Friday but decreased more than 2% last week. Mega-cap tech names dragged markets lower on Friday as Amazon and Microsoft each declined more than 2% while Meta Platforms and Google-parent Alphabet each dropped more than 1%. Adobe plummeted 13.67% on the day after issuing weaker-than-expected quarterly revenue guidance. Investors also weighed consumer sentiment data from the University of Michigan, which came in slightly below expectations. The Survey of Consumers posted a reading of 76.5, down 0.4 points from February and missing the consensus estimate for 77.4. Inflation expectations were unchanged at both the 1-year and 5-year horizons, at 3% and 2.9%, respectively. The current conditions index also was unchanged at 79.4. This week, all eyes will be on the Federal Open Market Committee (FOMC) meeting beginning on Tuesday and the rate decision on Wednesday. Rates are widely expected to be unchanged this week. Housing Starts & Permits data and Existing Home Sales figures will also be released this week.
Most U.S. factor strategies saw losses on Friday with S&P 500 Growth (SPYG), S&P 500 Quality (SPHQ), and S&P 500 Pure Growth (RPG) all slipping at least 1%. S&P 500 Pure Value (RPV) gained 49 bps and S&P 500 Divided (SPYD) added 18 bps. Last week, factors were split. S&P 500 High Beta (SPHB) dropped 2.54% and was the worst performing factor. SPYD was also down 1.12% while S&P 500 Value with Momentum (SPVM) increased 1.09%. Developed ex-U.S. Markets (EFA) inched higher by 4 bps on Friday despite losses from South Korea (EWY, -2.18%) and Hong Kong (EWH, -85 bps). Japan (EWJ) climbed 74 bps. Emerging Markets (EEM, -61 bps) were pulled lower by South Africa (EZA, -1.14%) and Indonesia (EIDO, -1.05%). EFA and EEM dipped 45 bps and 12 bps, respectively, last week.
Sectors: Technology (XLK) declined 1.51% on Friday and lagged other U.S. sectors. Semiconductors (XSD, -78 bps) and Software & Services (XSW, -53 bps) were weak, impacting XLK. Communication Services (XLC) and Consumer Discretionary (XLY) both dropped 1.00% while Health Care (XLV) slid 40 bps. Financials (XLF, -10 bps), Real Estate (XLRE, -5 bps), and Consumer Staples (XLP, -4 bps) also saw modest declines. Energy (XLE) gained 30 bps and Utilities (XLU) rose 14 bps. XLE handily outgained other sectors last week, climbing 3.84%. Materials (XLB) also advanced 1.62%. XLRE retreated nearly 3% on the week while XLY sank 1.25% and XLK fell 83 bps. XSD plunged 5.66% last week and is now trading below its 50-day moving average.
Themes: After underperforming earlier in the week, Cannabis (MJ) surged 9.65% on Friday following news that the Drug Enforcement Agency would soon reclassify the cannabis to a lower-risk category. Blockchain (BLOK) and Biotech (SBIO) were also each up more than 1.30% and Advanced Materials (REMX) increased 72 bps. Cloud Computing (SKYY) lagged, dropping 1.73%. Big Data (AIQ) and Cyber Security (HACK) both declined 1.57% while Digital Infrastructure (SRVR) and 3D Printing (PRNT) each sank around 1%. MJ climbed more than 5% last week but is still down 4.48% over the past month. REMX also gained 1.59% on the week and Casinos & Gaming (BETZ) added 7 bps. All other global thematic segments were in the red last week with most falling more than 1.50%. Clean Energy (PBW) and Solar (TAN) both plummeted more than 7% and Genomics (ARKG) sank 6.35%.
Commodities & Yields: The U.S. Dollar (UUP) added 11 bps, U.S. Aggregate Bonds (AGG) dipped 1 bps, and Preferred & Income Securities (PFF) rose 22 bps on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.723% and the U.S. 10-Year Treasury Yield stood at 4.304%. Broad Commodities (DJP) added 23 bps on the day as Silver (SLV) gained 1.32%, Copper (CPER) climbed 1.98%, and Agriculture (DBA) jumped 2.17%. CPER is up nearly 10% in the last month and DBA has risen 8.21%.
Daily Note
3.15.2024
Equities: Following hotter-than-expected Producer Price Index (PPI) results, U.S. equity markets saw losses on Thursday. The Dow Jones Industrial Average (DIA) dropped 29 bps, the NASDAQ 100 (QQQ) slipped 25 bps, and the S&P 500 (SPY) declined 20 bps. Small-Caps (IJR) and Mid-Caps (IJH) underperformed, sinking 1.53% and 1.21%, respectively. The PPI increased 0.6% month-over-month in February, which was well above the +0.3% estimate and the 0.3% increase seen in January. On a year-over-year basis, the headline PPI increased 1.6%, the biggest move since September 2023. Excluding food and energy, the core PPI accelerated by 0.3%, compared with the estimate for a 0.2% increase. Treasury yields pushed higher following the results with the U.S. 2-Year nearing 4.70% and the U.S. 10-Year approached 4.30%. Separately, Retail Sales climbed 0.4% month-over-month and 1.5% year-over-year. Sales at stores, online and in restaurants rose 0.6% in February from the prior month, up from January’s revised 1.1% decline. On the earnings front, Dick’s Sporting Goods jumped more than 15% yesterday after beating earnings and revenue expectations. After the close, Adobe beat on the top and bottom lines but issued weaker-than-expected quarterly revenue guidance. On Friday, Industrial Production figures, Consumer Sentiment data, and the Empire State Manufacturing Index will be released.
S&P 500 Growth (SPYG) added 14 bps yesterday and was the only U.S. factor strategy in the green. S&P 500 High Beta (SPHB) retreated 1.74%, S&P 500 Dividend (SPYD) fell 1.35%, and S&P 500 Pure Value (RPV) sank 1.12%. Developed ex-U.S. Markets (EFA, -73 bps) were pulled lower by Australia (EWA, -1.91%) and Hong Kong (EWH, -1.84%). The Netherlands (EWN) also decreased 1.04%. Emerging Markets (EEM) dipped 51 bps on weakness from South Africa (EZA, -2.24%), China (MCHI, -1.50%), and Brazil (EWZ, -86 bps).
Sectors: Energy (XLE) had another strong showing yesterday, rising 1.03% as WTI Crude Oil prices hit the highest levels since November. Oil & Gas Equipment & Services (XES, +90 bps) and Oil & Gas Exploration & Production (XOP, +44 bps) were the only industries in positive territory on the day. Technology (XLK) also inched higher by 2 bps while all other sectors finished lower. Real Estate (XLRE) lagged, sinking 1.41%. Utilities (XLU), Financials (XLF), and Consumer Staples (XLP) were all down around 80 bps, Consumer Discretionary (XLY) declined 64 bps, and Materials (XLB) fell 53 bps. Biotech (XBI, -2.73%), Regional Banks (KRE), and Semiconductors (XSD, -2.40%) were the worst performing industries.
Themes: All global thematic segments registered negative returns on Thursday with Genomics (ARKG, -3.83%) falling the furthest. Multi-Theme (ARKK), Blockchain (BLOK), and Biotech (SBIO) all fell more than 3% while Clean Energy (PBW), FinTech (FINX), Solar (TAN), Disruptive Tech (ARKW), and Advanced Materials (REMX) all dropped more than 2.50%. Cannabis (MJ) also declined 2.20% and is approaching oversold territory, along with ARKG and PBW. Water (PHO, -63 bps) and Cloud Computing (SKYY, -75 bps) were the best performing themes for the day. Most themes are on pace for a losing week this week.
Commodities & Yields: The U.S. Dollar (UUP) increased 54 bps, U.S. Aggregate Bonds (AGG) dipped 63 bps, and 20+ Year Treasury Bonds (TLT) tumbled 1.54% yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.691% and the U.S. 10-Year Treasury Yield stood at 4.298%. Broad Commodities (DJP) added 10 bps as Natural Gas (UNG) climbed 4.43%, WTI Crude Oil (USO) rose 1.61%, Gold (GLD) declined 42 bps, and Corn (CORN) sank 1.15%.
Daily Note
3.14.2024
Equities: The NASDAQ 100 (QQQ) and the S&P 500 (SPY) declined 77 bps and 16 bps, respectively, while the Dow Jones Industrial Average (DIA) added 11 bps on Wednesday as investors awaited Thursday’s Producer Price Index (PPI) results and Retail Sales data. Markets were impacted by Nvidia, Meta Platforms, and Apple, which all slumped around 1% yesterday. United States Steel Corp also plummeted nearly 13% after a report from the Financial Times said that President Biden plans to express “serious concern” over its proposed acquisition by Nippon Steel Corp. The White House had said in December that the deal, worth $14.9 billion, warrants scrutiny given U.S. Steel’s integral role in producing a material vital to national security, and in terms of the deal’s potential impact on “supply chain reliability.” On the earnings front, DollarTree plunged more than 14% after reporting disappointing quarterly earnings results and announced plans to close nearly 1,000 stores across the country. Bitcoin also continued to push higher yesterday, leading the newly launched Bitcoin ETFs to climb around 3%. Over the past month, the recently launched Bitcoin ETFs, including IBIT, FBTC, BITO, ARKB, and BTCO, are all up around 48%.
U.S. factor strategies were split yesterday with S&P 500 Enhanced Value (SPVU) rising 76 bps and S&P 500 Growth (SPYG) falling 43 bps. S&P 500 Pure Value (RPV) gained more than 60 bps while S&P 500 High Beta (SPHB) and S&P 500 Pure Growth (RPG) each dipped 30 bps. SPVU and RPV registered new 52-week highs on Wednesday. Developed ex-U.S. Markets (EFA) inched higher by 1 bps as Australia (EWA) increased 74 bps, France (EWQ) advanced 73 bps, and Japan (EWJ) declined 87 bps. Emerging Markets (EEM, -31 bps) were pulled lower by India (INDA, -2.44%). Mexico (EWW) jumped 2.50%, South Africa (EZA) added 1.69%, and China (MCHI) was up 37 bps.
Sectors: Energy (XLE) climbed 1.60% and was the top performing U.S. sector on Wednesday. XLE, which entered overbought territory following yesterday’s gains, received a boost from Oil & Gas Exploration & Production (XOP, +2.11%) and Oil & Gas Equipment & Services (XES, +1.56%). Materials (XLB) gained 99 bps, Financials (XLF) and Utilities (XLU) were both up around 70 bps, and Industrials (XLI) and Consumer Staples (XLP) rose around 25 bps. XLB, XLF, and Communication Services (XLC, +17 bps) all hit new 52-week highs. Technology (XLK) dropped 1.08% on weakness from Semiconductors (XSD, -2.77%). Real Estate (XLRE) declined 63 bps despite strength from Homebuilders (XHB, +1.50%). Health Care (XLV) also dipped 39 bps.
Themes: Cannabis (MJ) registered just its 2nd day of positive returns in 7 sessions yesterday, gaining 2.25%. Blockchain (BLOK) also advanced 1.47% while Advanced Materials (REMX), Online Retail (IBUY), and Biotech (SBIO) all rose more than 1%. IBUY hit new 52-week highs along with FinTech (FINX, +78 bps), Digital Payments (IPAY, +47 bps), Disruptive Tech (ARKW, +36 bps), and Smart Infrastructure (GRID, +35 bps). Clean Energy (PBW) fell 2.01% to new 52-week lows. PBW has been the worst performing segments year-to-date, slumping 24.56%. Connectivity (FIVG, -1.70%), Solar (TAN, -1.68%), and Industrial Revolution (ARKQ, -1.25%) were also weak on Wednesday.
Commodities & Yields: U.S. Aggregate Bonds (AGG) dipped 18 bps, 20+ Year Treasury Bonds (TLT) declined 48 bps, and the U.S. Dollar (UUP) dropped 11 bps yesterday. At the close, the U.S. 2-Year Treasury Yield stood at 4.622% and the U.S. 10-Year Treasury Yield stood at 4.192%. Broad Commodities (DJP) rose 1.01% as Energy (DBE) jumped 2.01%, Precious Metals (DBP) advanced 1.25%, and Industrial Metals (DBB) increased 1.12%. WTI Crude Oil (USO) and Gasoline (UGA) were both up more than 2% while Silver (SLV) and Copper (CPER) both gained more than 3%.
Daily Note
3.13.2024
Equities: As investors weighed February’s Consumer Price Index (CPI) results, major averages registered positive returns yesterday with the tech-oriented NASDAQ 100 (QQQ) rising 1.43%, the S&P 500 (SPY) climbing 1.08%, and the Dow Jones Industrial Average (DIA) advancing 61 bps. SPY hit fresh 52-week highs once again and is nearing overbought territory. Mid-Caps (IJH) also added 54 bps while Small-Caps (IJR) dipped 27 bps. According to the Bureau of Labor Statistics, the CPI increased 0.4% month-over-month and 3.2% year-over-year in February, which were both relatively in line with estimates. The Core CPI, which excludes volatile food and energy prices, was up 0.4% for the month and up 3.8% for the year, also both fairly in line with estimates. Energy costs rose 2.3% in February, lifting overall inflation figures. Food costs were flat on the month while shelter rose another 0.4%. While the year-over-year inflation figure is off the mid-2022 peak, it remains well above the Fed’s 2% goal as the central bank approaches the Federal Open Market Committee (FOMC) meeting in a week. Following the CPI results, there is currently a 99% probability of no rate change at the March meeting and an 86.1% probability of no rate change at the May meeting, according to the CME FedWatch Tool. Producer Price Index (PPI) results and Retail Sales data will be released on Thursday.
Most U.S. factor strategies saw gains on Tuesday. S&P 500 Momentum (SPMO, +2.06%), S&P 500 Growth (SPYG, +1.92%), and S&P 500 Pure Growth (RPG, +1.76%) bounced back from Monday’s losses. S&P 500 Quality (SPHQ) also increased 1.18% while S&P 500 Dividend (SPYD) slid 40 bps and S&P 500 Pure Value (RPV) dropped 39 bps. Emerging Markets (EEM) were up 1.10% on the day as China (MCHI) advanced another 2.06% and Taiwan (EWT) rose 1.59%. Developed ex-U.S. Markets (EFA, +80 bps) benefitted from solid gains from Hong Kong (EWH, +1.76%), South Korea (EWY, +1.48%), the Netherlands (EWN, +1.28%) and Germany (EWG, 1.26%).
Sectors: Technology (XLK) jumped 2.05%, handily outpacing other U.S. sectors on Tuesday. Communication Services (XLC) and Consumer Discretionary (XLY) both added more than 85 bps while Consumer Staples (XLP), Health Care (XLV), Industrials (XLI), and Financials (XLF) all gained around 45 bps. XLK and XLF both registered new 52-week highs yesterday. Utilities (XLU) was the worst performing sector, slipping 97 bps. Real Estate (XLRE) declined 25 bps and Energy (XLE) fell 16 bps. Materials (XLB, -1 bps) was dragged lower by Metals & Mining (XME), which decreased 1.74%. All sectors are still trading more than 2% above relative 50-day moving averages.
Themes: Gloomy day for Solar (TAN) as it underperformed other global thematic segments yesterday, declining 3.79%. Genomics (ARKG) and Clean Energy (PBW) were also weak, slipping 1.64% and 1.63%, respectively. Wind (FAN) declined 90 bps, Advanced Materials (REMX) sank 84 bps, Biotech (SBIO) dipped 80 bps, and Multi-Theme (ARKK) was down 79 bps. Big Data (AIQ, +2.00%) was the best performing segment followed by Evolving Consumer (SOCL, +1.55%) and Connectivity (FIVG, +1.47%). eSports & Video Games (ESPO), Cloud Computing (SKYY), and Smart Infrastructure (GRID) all gained more than 1%.
Commodities & Yields: At yesterday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.599% and the U.S. 10-Year Treasury Yield stood at 4.155%. U.S. Aggregate Bonds (AGG) sank 25 bps, 20+ Year Treasury Bonds (TLT) dropped 84 bps, and the U.S. Dollar (UUP) added 7 bps on Tuesday. Broad Commodities (DJP) declined 13 bps as Precious Metals (DBP) slid 1.11% and Agriculture (DBA) rose 1.14% on the day. Gold (GLD) and Silver (SLV) were each down more than 1% and Natural Gas (UNG) fell 2.42%.
Daily Note
3.12.2024
Equities: Major averages were mixed on Monday ahead of Tuesday’s Consumer Price Index (CPI) report and Thursday’s Producer Price Index (PPI) report. The NASDAQ 100 (QQQ) fell 37 bps, the S&P 500 (SPY) dipped 9 bps, and the Dow Jones Industrial Average (DIA) added 11 bps. All three major averages are still trading above relative 50-day and 200-day moving averages. Small-Caps (IJR, -45 bps) and Mid-Caps (IJH) also saw modest losses yesterday. Technology names were once again shaken by Nvidia, which slipped another 2% after declining more than 5% on Friday. Super Micro Computer, another stock tied to artificial intelligence, dropped 5.24% on Monday. As the price above Bitcoin continued to climb above $71K, several Bitcoin ETFs, including the ProShares Bitcoin Strategy ETF (BITO), the ARK 21Shares Bitcoin ETF (ARKB), the iShares Bitcoin ETF (IBIT), and the Fidelity Wise Origin Bitcoin Fund (FBTC), all surged around 4% yesterday. IBIT has gathered more than $10 billion in net inflows since launching in January and FBTC has gathered more than $6 billion in net inflows. After the closing bell, Oracle reported earnings results that topped expectations but missed on revenue. The company’s cloud services and license support segment, its largest business, saw a 12% increase in revenue year-over-year.
Growth-oriented pockets of the markets underperformed on Monday as S&P 500 Momentum (SPMO, -1.23%), S&P 500 Pure Growth (RPG, -64 bps), and S&P 500 Growth (SPYG) trailed other U.S. factor strategies. Most factors saw modest gains with S&P 500 Low Volatility (SPLV) increasing 54 bps and S&P 500 Pure Value (RPV) adding 43 bps. Developed ex-U.S. Markets (EFA) slid 57 bps yesterday as Japan (EWJ) declined 2.22% and Australia (EWA) fell 1.45%. Emerging Markets (EEM) advanced 22 bps as China (MCHI) jumped 2.18%. China’s Consumer Price Index climbed 0.7% year-over-year in February while the country’s Producer Price Index dropped 2.7% year-over-year.
Sectors: Materials (XLB) and Energy (XLE) outgained other U.S. sectors yesterday, climbing 1.13% and 1.03%, respectively. XLE was lifted by Oil & Gas Equipment & Services (XES, +1.29%). Consumer Staples (XLP) and Utilities (XLU) were also up around 50 bps while Financials (XLF) added 17 bps. XLB and XLF hit new 52-week highs and are the only sectors sitting in overbought territory. Industrials (XLI) lagged, falling 52 bps on weakness from Aerospace & Defense (XAR, -1.33%). Real Estate (XLRE) declined 50 bps, Technology (XLK) and Consumer Discretionary (XLY) each sank 27 bps, and Communication Services (XLC) dipped 19 bps. All sectors are trading above relative 50-day and 200-day moving averages.
Themes: Cannabis (MJ) continued its recent underperformance and slid another 3.40% yesterday. Over the past month, MJ has plunged more than 16%. Blockchain (BLOK) and Biotech (SBIO) both dropped more than 2% on Monday while Genomics (ARKG) fell 1.38% and Robotics & AI (ROBO) declined 97 bps. Advanced Materials (REMX) was the best performing global thematic segment on the day, surging 3.09%. Space (UFO) gained 1.41% and Solar (TAN) rose 1.33%. Disruptive Tech (ARKW) also increased 30 bps to new 52-week highs.
Commodities & Yields: Broad Commodities (DJP) rose 43 bps yesterday with Gasoline (UGA) climbing 2.01%, Silver (SLV) adding 54 bps, Copper (CPER) gaining 99 bps, and Sugar (CANE) advancing 3.50%, Natural Gas (UNG) also slipped 2.73%. The U.S. Dollar (UUP) was up 11 bps, U.S. Aggregate Bonds (AGG) fell 11 bps, and 20+ Year Treasury Bonds (TLT) dipped 5 bps. At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.534% and the U.S. 10-Year Treasury Yield stood at 4.104%.
Daily Note
3.11.2024
Equities: On Friday, U.S. equity markets posted losses as investors sifted through the Employment Situation report for February. The NASDAQ 100 (QQQ) fell 1.44%, the S&P 500 (SPY) declined 60 bps, and the Dow Jones Industrial Average (DIA) dipped 12 bps. All three major averages were lower last week with QQQ dropping 1.48%, DIA retreating 85 bps, and SPY sinking 22 bps. According to the Bureau of Labor Statistics, nonfarm payrolls increased by 275K last month, which was well above the +198K estimate. January’s figures saw a steep downward revision from +353K to +229K and December’s total was revised down to +290K from +333K. The unemployment rate unexpectedly ticked higher to 3.9%. Average hourly earnings were up just 0.1% month-over-month but rose 4.3% year-over-year. Tech-names were also impacted on Friday by Nvidia, which slipped more than 5.5%. This week, investors will be monitoring Consumer Price Index (CPI) results, Producer Price Index (PPI) figures, Retail Sales data, and the Industrial Production report.
Most U.S. factor strategies declined on Friday with S&P 500 Momentum (SPMO) sliding 1.78%, S&P 500 Pure Growth (RPG) dropping 1.23%, and S&P 500 Quality (SPHQ) falling 1.14%. S&P 500 Dividend (SPYD) outperformed, adding 60 bps. Despite Friday’s losses, most factors saw gains last week. SPYD climbed 2.62%, S&P 500 Pure Value (RPV) rose 1.47%, and SPMO increased 38 bps. S&P 500 Growth (SPYG) was down 1.18% on the week. Developed ex-U.S. Markets (EFA, -33 bps) were pulled lower by the Netherlands (EWN, -1.91%) on Friday. Emerging Markets (EEM) also dipped 10 bps as Brazil (EWZ) slipped 2.33%. Last week, EFA advanced 1.60% and EEM gained 84 bps.
Sectors: Real Estate (XLRE) outpaced other U.S. sectors on Friday, advancing 1.18%. Energy (XLE, +35 bps), Utilities (XLU, +25 bps), and Financials (XLF, +17 bps) were the only other sectors in positive territory. XLF hit fresh 52-week highs once again and remains in overbought territory. Technology (XLK) lagged other sectors, falling 1.49% on weakness from Semiconductors (XSD, -2.96%). Consumer Staples (XLP) decreased 79 bps, Materials (XLB) sank 58 bps, and Consumer Discretionary (XLY) declined 37 bps. Utilities (XLU) jumped 3.29% last week while XLRE, XLE, and XLB all gained more than 1%. XLY dropped 2.55% on the week and XLK slid 1.62%.
Themes: Global thematic segments were split on Friday, led by Blockchain (BLOK, +2.15%), Cannabis (MJ, +1.89%), and Solar (TAN, +1.78%). FinTech (FINX) also gained 1.57% while 3D Printing (PRNT), Mobile Payments (IPAY), Multi-Theme (ARKK), and Online Retail (IBUY) all rose around 1%. Connectivity (FIVG) was the worst performing segment for the day, sinking 2.18%. Advanced Materials (REMX, -1.93%), eSports & Video Games (ESPO, -1.64%), and NextGen Transportation (DRIV, -1.22%) also underperformed. Last week, TAN surged 3.60% and Wind (FAN) added 2.81%. BLOK and PRNT were also up more than 2.5% for the week while REMX sank 6.42% and MJ declined 5.26%.
Commodities & Yields: The U.S. Dollar (UUP) inched higher by 4 bps, U.S. Aggregate Bonds (AGG) rose 9 bps, and 20+ Year Treasury Bonds (TLT) dipped 18 bps on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.486% and the U.S. 10-Year Treasury Yield stood at 4.088%. Broad Commodities (DJP) decreased 23 bps on weakness from Energy (DBE, -1.10%). WTI Crude Oil (USO) fell 1.17% and Gasoline (UGA) slid 1.00%. Copper (CPER) also dropped 82 bps while Gold (GLD) increased 85 bps and Wheat (WEAT) gained 1.98%.
Daily Note
3.7.2024
Equities: The losing streak for U.S. equity markets ended on Wednesday as the NASDAQ 100 (QQQ) rose 63 bps, the S&P 500 (SPY) increased 51 bps, and the Dow Jones Industrial Average (DIA) gained 26 bps. Small-Caps (IJR) also added 36 bps while Mid-Caps (IJH) advanced 70 bps to new 52-week highs. Investors digested remarks from Federal Reserve Chairman Jerome Powell to the House of Representatives yesterday. Powell told the House Financial Services Committee that the central bank could lower interest rates this year, but policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly. Powell is also slated to appear before the Senate Banking Committee on Thursday. Separately, a report from ADP showed that private sector job growth improved in February but came in slightly below estimates. Companies added 140K positions for the month, an increase from the upwardly revised 111K in January but just below the estimate for 150K. Leisure and hospitality and construction saw sizeable job growth on the month. According to the Job Openings & Labor Turnover Survey (JOLTS) results released on Wednesday by the Labor Department, job openings dipped 26K in February to 8.86 million and total separations totaled 5.3 million, little changed from the previous month. Openings are down 1.5 million from a year ago and down 3.3 million from the March 2022 peak. In addition to Powell’s comments to the Senate, investors will be keeping an eye on Jobless Claims data and U.S. International Trade in Goods and Services data on Thursday.
All U.S. factors were in positive territory on Wednesday led by S&P 500 Momentum (SPMO, +92 bps), and S&P 500 Minimum Variance (SPMV, +86 bps). SPMO hit fresh 52-week highs and sits well into overbought territory. S&P 500 Pure Growth (RPG), S&P 500 Quality (SPHQ), and S&P 500 High Beta (SPHB) all rose around 70 bps on the day while S&P 500 Pure Value (RPV) added 44 bps. Developed ex-U.S. Markets (EFA) climbed 1.18% to new 52-week highs yesterday, benefitting from solid returns from the Netherlands (EWN, +1.88%), Australia (EWA, +1.75%), and Japan (EWJ, +1.52%). Emerging Markets (EEM) increased 1.45% as South Africa (EZA) jumped 3.39%, Taiwan (EWT) advanced 2.32%, and Thailand (THD) gained 2.16%.
Sectors: Utilities (XLU) climbed 96 bps yesterday, outgaining other U.S. sectors. Consumer Staples (XLP, +84 bps), Technology (XLK, +79 bps), and Materials (XLB) also posted solid returns. XLK was bolstered by Semiconductors (XSD, +2.50%) and Software & Services (XSW, +1.64%). Health Care (XLV) added 68 bps on the day while Real Estate (XLRE), Financials (XLF), and Industrials (XLI) all rose more than 50 bps. XLI received a boost from Aerospace & Defense (XAR), which jumped 1.51%. XLB and XLF both hit new 52-week highs and sit in overbought territory. Consumer Discretionary (XLY) fell 36 bps and was the only sector to see losses. XLY was dragged lower by Retail (XRT, -1.59%).
Themes: Cannabis (MJ) was the lone global thematic segment in the red yesterday, sinking 3.03%. MJ has plunged nearly 19% over the past month and is approaching oversold territory. Advanced Materials (REMX) and Blockchain (BLOK) were the top performing segments on Wednesday, both surging more than 4%. Disruptive Tech (ARKW, +2.91%) was also strong followed by FinTech (FINX, +2.30%), Solar (TAN, +2.19%), Clean Energy (PBW, +2.16%), and 3D Printing (PRNT, +2.00%). NextGen Transportation (DRIV) and Wind (FAN) were both up more than 1.80%. eSports & Video Games (ESPO, +1.44%), Digital Payments (IPAY, +1.40%), and Smart Infrastructure (GRID, +1.26%) all hit new 52-week highs.
Commodities & Yields: U.S. Aggregate Bonds (AGG) advanced 15 bps, 20+ Year Treasury Bonds (TLT) gained 59 bps, and the U.S. Dollar (UUP) declined 36 bps on Wednesday. At the close, the U.S. 2-Year Treasury Yield stood at 4.562% and the U.S. 10-Year Treasury Yield stood at 4.104%. Broad Commodities (DJP) increased 46 bps as WTI Crude Oil (USO) rose 1.21%, Silver (SLV) climbed 1.98%, Gold (GLD) added 82 bps, and Sugar (CANE) jumped 2.52%. Wheat (WEAT) was also down 2.32% and Natural Gas (UNG) slid 1.26%.
Daily Note
3.6.2024
Equities: For the second consecutive session, U.S. equity markets posted losses on Tuesday with the NASDAQ 100 (QQQ) declining 1.79%, the Dow Jones Industrial Average (DIA) sinking 1.04%, and the S&P 500 (SPY) dropping 1.00%. SPY exited overbought territory, but all three major averages are still trading well above relative 50-day and 200-day moving averages. Tech names were shaken by Apple, which fell nearly 3% yesterday after a report that iPhone sales plummeted 24% in China in the first 6 weeks of 2024. Apple continues to face stiff competition from local smartphone firms like Huawei, Oppo, Vivo, and Xiaomi. On the earnings front, GitLab plunged 21% after posting a weak forecast for the full year and Target climbed just over 12% after reporting holiday-quarter revenue and earnings that topped estimates. Target’s total revenue increased 2% year-over-year, but the company also issued weak forward guidance. Investors also weighed February’s ISM Services Index report, which showed that services industries reported slightly slower than expected activity for the month. The index was down slightly from January and narrowly remains in expansion territory. Additionally, according to the Commerce Department, new orders for U.S.-manufactured goods dropped more than expected in January. On Wednesday, investors will be monitoring Fed Chair Jerome Powell’s monetary policy update to the House of Representatives along with the ADP Employment Report and the Job Openings & Labor Turnover Survey (JOLTS) results.
Value-oriented pockets of the markets outperformed yesterday as S&P 500 Enhanced Value (SPVU) gained 33 bps and S&P 500 Pure Value (RPV) rose 28 bps. Most other factors were in negative territory for the day with S&P 500 Growth (SPYG), S&P 500 Pure Growth (RPG), and S&P 500 High Beta (SPHB) all slipping more than 1%. S&P 500 Quality (SPHQ, -93 bps) and S&P 500 Momentum (SPMO, -77 bps) were also weak. Emerging Markets (EEM) declined 89 bps on Tuesday on losses from China (MCHI, -1.11%) and Taiwan (EWT, 66 bps). Developed ex-U.S. Markets (EFA, -18 bps) were impacted by underperformance from Hong Kong (EWH, -1.97%), South Korea (EWY, -1.97%), and the Netherlands (EWN, -1.32%).
Sectors: Energy (XLE) was the top performing U.S. sector yesterday, advancing 74 bps. Consumer Staples (XLP, +24 bps) and Financials (XLF, +2 bps) were the only other sectors in the green. XLF hit new 52-week highs and was lifted by Regional Banks (KRE, +4.03%) and Banks (KBE, +3.01%). Technology (XLK) slid 2.46%, pulled lower by Software & Services (XSW, -4.06%) and Semiconductors (XSD, -2.36%). Real Estate (XLRE) and Consumer Discretionary (XLY) were down more than 1.20% while Industrials (XLI), Communication Services (XLC), and Health Care (XLV) all fell around 80 bps. Materials (XLB) also dipped 54 bps. All sectors are trading above relative 50-day moving averages and Utilities (XLU, -29 bps) is the only sector trading below its 200-day moving average.
Themes: All global thematic segments registered negative returns on Tuesday with Advance Materials (REMX, -7.19%) falling the furthest. Blockchain (BLOK) decreased 4.79%, Disruptive Tech (ARKW) dropped 3.99%, Multi-Theme (ARKK) fell 3.51%, and Cloud Computing (SKYY) slid 3.45%. Genomics (ARKG) was also down 3.16% followed by Clean Energy (PBW, -2.91%), FinTech (FINX, -2.83%), and Cyber Security (HACK, -2.68%). PBW is now trading just 52 bps from 52-week lows. Wind (FAN) and Space (UFO) were the best performers, both dipping around 30 bps. Despite climbing more than 23.5% over the past month, Blockchain (BLOK) has seen $563 million in net outflows in the period.
Commodities & Yields: The U.S. Dollar (UUP) dipped 11 bps, U.S. Aggregate Bonds (AGG) added 54 bps, and 20+ Year Treasury Bonds (TLT) jumped 1.42% yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.552% and the U.S. 10-Year Treasury Yield stood at 4.137%. Broad Commodities (DJP) sank 41 bps as Agriculture (DBA) declined 1.16%. Wheat (WEAT) declined 1.89% and Corn (CORN) slipped 1.02%. Silver (SLV) decreased 87 bps and Gasoline (UGA) retreated 2.22%.
Daily Note
3.5.2024
Equities: U.S. equity markets slipped from 52-week highs on Monday as investors awaited monetary policy updates from Federal Reserve Chairman Jerome Powell later this week. The NASDAQ 100 (QQQ) dropped 36 bps, the Dow Jones Industrial Average (DIA) fell 28 bps, and the S&P 500 (SPY) dipped 11 bps. SPY remains in overbought territory. Mid-Caps (IJH) outperformed, climbing 60 bps, while Small-Caps (IJR) declined 51 bps. Apple retreated 2.54% on Monday after the European Commission hit the company with a nearly $2 billion antitrust fine for abusing its dominant position in the market for the distribution of music streaming apps. In response to the fine, Apple said Spotify would stand to gain the most from the EU pronouncement. Ford gained more than 2% on the day after reporting strong U.S. sales figures for February. Sales jumped 10.5% year-over-year led by increases in its hybrid and all-electric vehicles sales. JetBlue Airways and Spirit Airlines announced Monday they are ending their agreement to merge amid substantial regulatory hurdles. Spirit plunged nearly 11% yesterday while JetBlue was up more than 4%. On Tuesday, investors will be looking towards Factory Orders data and the ISM Services Index results.
U.S. factor strategies were split yesterday with S&P 500 Dividend (SPYD) jumping 92 bps and S&P 500 Growth (SPYG) sinking 41 bps. S&P 500 Value (SPYD) added 29 bps while S&P 500 High Beta (SPHB) slipped 33 bps. Developed ex-U.S. Markets (EFA) fell 26 bps on Monday despite solid returns from South Korea (EWY, +1.03%). Australia (EWA) was down 70 bps and Japan (EWJ) declined 58 bps. Emerging Markets (EEM, -22 bps) were pulled lowed by China (MCHI, -1.82%) and Indonesia (EIDO, -1.33%). Taiwan (EWT) also increased 90 bps on the day. MCHI has risen nearly 8% in the past month but is still down 4.49% year-to-date.
Sectors: Utilities (XLU) gained 1.69% on Monday led other U.S. sectors. Real Estate (XLRE) also climbed 1.14% and Materials (XLB) rose 73 bps while Industrials (XLI) and Financials (XLF) were each up around 30 bps. XLF received a boost from Capital Markets (KCE), which advanced 1.16%. XLB, XLF, XLI, and Technology (XLK, +0 bps) are all currently trading at 52-week highs. XLB and XLI are the only sectors in overbought territory. Consumer Discretionary (XLY) and Communication Services (XLC) underperformed, both declining more than 1.30%. Energy (XLE) fell 1.07% and Health Care (XLV) dipped 15 bps.
Themes: Advanced Materials (REMX) and Cannabis (MJ) lagged other global thematic segments yesterday, dropping 2.72% and 2.63%, respectively. Clean Energy (PBW) decreased 2.34%, Genomics (ARKG) slid 1.87%, and Solar (TAN) slipped 1.79%. Space (UFO), Evolving Consumer (SOCL), 3D Printing (PRNT), Casinos & Gaming (BETZ), and Biotech (SBIO) were all down more than 1%. Disruptive Tech (ARKW, +1.08%) was the only segment to gain more than 1% on the day. Connectivity (FIVG, +96 bps), Blockchain (BLOK, +87 bps), and Water (PHO, +61 bps) registered solid gains as well on Monday.
Commodities & Yields: At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.608% and the U.S. 10-Year Treasury Yield stood at 4.219%. The U.S. Dollar (UUP) was flat, U.S. Aggregate Bonds (AGG) declined 25 bps, and 20+ Year Treasury Bonds (TLT) dipped 40 bps. Broad Commodities (DJP, +71 bps) were lifted by gains from Natural Gas (UNG, +5.36%), Silver (SLV, +3.26%), Gold (GLD, +1.62%), and Corn (CORN, +1.40%). WTI Crude Oil (USO) decreased 1.27% and Sugar (CANE) fell 1.48%.
Daily Note
3.4.2024
Equities: On Friday, U.S. equity markets registered positive returns to close out another winning week. The tech-oriented NASDAQ 100 (QQQ) climbed 1.51%, the S&P 500 (SPY) rose 94 bps, and the Dow Jones Industrial Average (DIA) gained 35 bps. All three major averages hit fresh 52-week highs and SPY currently sits in overbought territory. Last week, QQQ added 2.02%, SPY increased 98 bps, and DIA inched higher by 1 bps. QQQ was bolstered by NVIDIA, which advanced another 4% on Friday. NVIDIA has rocketed more than 262% over the past year and is up more than 65% thus far in 2024. New York Community Bancorp plunged nearly 26% on the day after announcing a leadership change and disclosed issues with its internal controls. The bank is already down more than 65% year-to-date. According to the Institute for Supply Chain Management, the ISM manufacturing index slipped to 47.8 for the month, down 1.3 points from January and below the 49.5 estimate. The index was impacted by a decline in new orders and lower production and employment readings. This week, investors will be looking towards Job Openings Labor Turnover Survey (JOLTS) results, U.S. International Trades and Services data, and the Employment Situation report. Federal Reserve Chairman Jerome Powell will also provide monetary policy updates to the House of Representatives on Wednesday and to the Senate on Thursday.
S&P 500 Momentum (SPMO) climbed 2.02% to new 52-week highs on Friday, outperforming other U.S. factor strategies. S&P 500 Pure Growth (RPG), S&P 500 Quality (SPHQ), and S&P 500 High Beta (SPHB) all gained more than 1% and hit fresh 52-week highs while S&P 500 Low Volatility (SPLV) and S&P 500 Pure Value (RPV) saw moderate losses. RPG, SPHB, and SPMO all increased around 3% last week and SPLV fell 70 bps. Emerging Markets (EEM) popped 1.23% on Friday and Developed ex-U.S. Markets (EFA) increased 97 bps. EEM slumped 30 bps last week and EFA added 78 bps.
Sectors: Utilities (XLU) and Financials (XLF) were the only U.S. sectors to finish lower on Friday, slipping 61 bps and 12 bps, respectively. Technology (XLK) was strong once again, climbing 1.83%. Energy (XLE), Real Estate (XLRE), and Health Care (XLV) all rose more than 1% while Communication Services (XLC) added 83 bps. Materials (XLB) and Industrials (XLI) both gained more than 40 bps. Last week, XLK, XLRE, and Consumer Discretionary (XLY) were all up more than 2% while XLV declined 1.03%. Energy (XLE), XLB, and XLI all increased more than 1% on the week as well.
Themes: All global thematic segments were in the green on Friday, except for Multi-Theme (ARKK, -21 bps) and Casinos & Gaming (BETZ, -2 bps). Connectivity (FIVG) and Advanced Materials (REMX) led the charge, both rising more than 3.35%. Biotech (SBIO) and eSports & Video Games (ESPO) both jumped more than 2.50% while Solar (TAN), Blockchain (BLOK), and Cloud Computing (SKYY) all gained more than 2%. Big Data (AIQ, +1.83%), NextGen Transportation (DRIV, +1.70%), and Evolving Consumer (SOCL, +1.67%) also saw solid returns on Friday. Nearly all segments posted gains last week with REMX surging more than 12%. BLOK also soared 9.30% and Disruptive Tech (ARKW) increased 7.52%.
Commodities & Yields: Broad Commodities (DJP) increased 67 bps on Friday as Precious Metals (DBP) climbed 1.67% and Energy (DBE) advanced 90 bps. U.S. Aggregate Bonds (AGG) rose 48 bps, 20+ Year Treasury Bonds (TLT) gained 62 bps, and the U.S. Dollar (UUP) dropped 18 bps. At Friday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.533% and the U.S. 10-Year Treasury Yield stood at 4.182%.