ETF Action: Research

12.2.2022

Equities: Mixed session for U.S. markets on Thursday as investors digested Fed Chair Powell’s comments on the central bank’s rate hike policy moving forward and the Core Personal Consumption Expenditures price index (PCE) results, which rose 0.2% month-over-month and 5% year-over-year in October. The NASDAQ 100 (QQQ) added 12 bps while the Dow Jones Industrial Average (DIA) declined 50 bps and the S&P 500 (SPY) dipped 7 bps. Treasury yields fell sharply for the second straight session with the U.S. 2-Year sinking below 4.25% and the U.S. 10-Year falling below 3.51%. The Employment Situation report for November will be released on Friday and will provide greater clarity on the U.S. labor market. U.S. factor strategies were split with S&P 500 Pure Growth (RPG, +36 bps) outpacing S&P 500 Pure Value (RPV, -57 bps). Year-to-date, RPV is still outperforming RPG by nearly 25%. Developed ex-U.S. Markets (EFA) rose 97 bps as Switzerland (EWL) climbed 1.42% and Hong Kong (EWH) gained 1.35%. Emerging Markets (EEM) fell 33 bps on weakness from South Africa (EZA, -4.68%).

Sectors: Communication Services (XLC) and Health Care (XLV) were the top performing U.S. sectors yesterday rising 58 bps and 29 bps, respectively. Technology (XLK, +14 bps), Materials (XLB, +12 bps), and Industrials (XLI, +3 bps) were the only other sectors to post gains on the day. XLV now sits 2.39% below 52-week highs. Financials (XLF, -58 bps) lagged while Consumer Staples (XLP) declined 45 bps and Energy (XLE) sunk 33 bps. On the industry level, Internet (XWEB, +2.18%) and Software & Services (XSW, +2.08%) outperformed and lifted XLK. Retail (XRT) slipped 1.35% as Costco (1.10% weight in XRT) declined nearly 7% yesterday on disappointing November sales figures.

Themes: Most thematic segments saw positive returns on Thursday led by Cannabis (MJ, +4.66%) and Cyber Security (HACK, +3.37%). MJ is currently trading more than 32% above 52-week lows. 3D Printing (PRNT), Cloud Computing (SKYY), Disruptive Tech (ARKW), Casinos & Gaming (BETZ), and eSports & Video Games (ESPO) all were up more than 1.50%. Solar (TAN, -2.95%) and Clean Energy (PBW, -2.44%) trailed followed by Biotech (SBIO, -1.34%). Just 3 other segments finished in the red yesterday: Advanced Materials (REMX), Smart Infrastructure (GRID), and Connectivity (FIVG). 

Commodities & Yields: The U.S. Dollar (UUP) decreased 1.22%, U.S. Aggregate Bonds (AGG) rose 83 bps, and 20+ Year Treasury Bonds (TLT) surged 3.19%. At Thursday’s close, the U.S. 2-Year Treasury Yield stood at 4.24% and the U.S. 10-Year Treasury Yield stood at 3.508%. Broad Commodities (DJP) finished down 29 bps despite positive returns from Precious Metals (DBP, +2.01%). Natural Gas (UNG) fell 1.65%, Nickel (JJN) climbed 3.25%, and Gold (GLD) rose 1.84%.

12.1.2022

Equities: On Wednesday, U.S. markets benefitted from encouraging rhetoric from Federal Reserve Chairman Jerome Powell which indicated that the central bank would begin to slow interest rate hikes in the coming months. All three major averages surged on the last trading day of November with the NASDAQ 100 (QQQ) climbing 4.56%, the S&P 500 (SPY) jumping 3.10%, and the Dow Jones Industrial Average (DIA) gaining 2.25%. Treasury yields dropped sharply with the U.S. 2-Year falling below 4.35% and the U.S. 10-Year dropping below 3.65%. In November, DIA was up 4.50%, SPY added 3.50%, and QQQ was relatively flat. The October Job Openings & Labor Turnover (JOLTS) results released Wednesday showed that job openings declined by 353K, but there are still around 1.7 job openings per available worker. All U.S. factor strategies posted gains yesterday led by S&P 500 Growth (SPYG, +4.26%) and S&P 500 High Beta (SPHB, +4.06%). All factors saw positive returns in November with S&P 500 Dividend (SPYD), which rose 6.25%, seeing the best returns. Emerging Markets (EEM, +2.89%) were lifted by continued strength from China (MCHI, +4.65%) on Wednesday. MCHI rocketed 25.88% in November while EEM gained 13.50%. Developed ex-U.S. Markets (EFA) added 1.77% yesterday and increased 11.50% in November.

Sectors: Each of the 11 U.S. sectors finished higher yesterday. Technology (XLK) outpaced other sectors, rising 5.02%, on strength from Semiconductors (XSD, +5.77%). Communication Services (XLC) returned +4.23% and Consumer Discretionary (XLY) added 3.45%. Utilities (XLU), Materials (XLB), Health Care (XLV), Real Estate (XLRE), and Consumer Staples (XLP) were all up over 2% on the day. XLV entered overbought territory and is now trading just 2.67% below 52-week highs. XLP also sits in overbought territory. XLB was the top performing sector in November, climbing 9.50%, followed by Industrials (XLI), which gained 6.50%. XSD was the best performing industry on the month, rising nearly 13%.

Themes: A sea of green for global themes on Wednesday as all segments increased more than 1.50% and most segments climbed more than 3.50%. Multi-Theme (ARKK) outperformed, surging 7.70%. Disruptive Tech (ARKW), Advanced Materials (REMX), and Genomics (ARKG) were all up more than 6% while Evolving Consumer (SOCL), Online Retail (IBUY), Clean Energy (PBW), Big Data (AIQ), and Solar (PBW) all increased by more than 5.50%. Thematic segments were mixed in November with Blockchain (BLOK) falling 13% and Evolving Consumer (SOCL) rising nearly 18%.

Commodities & Yields: At Wednesday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.337% and the U.S. 10-Year Treasury Yield stood at 3.639%. U.S. Aggregate Bonds (AGG) rose 78 bps yesterday while TIPS Bonds (TIP) increased 1.48% and the U.S. Dollar (UUP) sunk 80 bps. In November, UUP fell 3.93%, AGG increased 3.46%, and 20+ Year Treasury Bonds (TLT) added 6.38%. Broad Commodities (DJP) climbed 1.31% on Wednesday as all broad-based sectors saw gains. Industrial Metals (DBB) jumped 4.30% and Energy (DBE) was up 2.55%.

11.30.2022

Equities: Ahead of the October Job Openings and Labor Turnover (JOLTS) results and a speech from Fed Chair Jerome Powell on Wednesday, the NASDAQ 100 (QQQ) and the S&P 500 (SPY) posted losses for the second consecutive session on Tuesday. QQQ and SPY declined 76 bps and 17 bps, respectively, while the Dow Jones Industrial Average (DIA) was flat. Small-Caps (IJR, +36 bps) and Mid-Caps (IJH, +29 bps) bounced back from Monday’s declines while the U.S. 10-Year Treasury Yield jumped back above 3.75%. The Conference Board’s consumer confidence index results were released on Tuesday and indicated that consumer confidence declined to the lowest levels since July amid inflationary pressures and continued recession fears. Growth-oriented pockets of the markets underperformed with S&P 500 Growth (SPYG, -68 bps) lagging other U.S. factor strategies. S&P 500 Dividend (SPYD, +86 bps) and S&P 500 Pure Value (RPV, +73 bps) were the top performing factors on the day. Emerging Markets (EEM) climbed 2.15% as China (MCHI, +4.34%) was lifted by reports of declining COVID infections and high vaccination rates amongst the elderly in the country. Developed ex-U.S. Markets (EFA, +29 bps) benefitted from gains from Hong Kong (EWH, +2.95%) and South Korea (EWY, +2.67%).

Sectors: 6 of the 11 U.S. sectors finished higher yesterday led by Real Estate (XLRE, +1.67%) and Energy (XLE, +1.51%). XLE received a boost from Oil & Gas Equipment & Services (XES), which rose 2.03%. Industrials (XLI) and Financials (XLF) both gained more than 50 bps while Materials (XLB) increased 34 bps. Technology (XLK) was weak, falling 98 bps, and Utilities (XLU) declined 74 bps. Health Care (XLV) dipped 25 bps but still sits within 5% of 52-week highs. Metals & Mining (XME, +2.32%) was the best performing industry on the day while Internet (XWEB, -77 bps) was the worst performing industry. XWEB has fallen 55.67% year-to-date and is currently trading nearly 25% below its 200-day moving average.

Themes: Global thematic segments were split on Tuesday with Evolving Consumer (SOCL, +2.05%) and Cannabis (MJ, +2.01%) outperforming. Evolving Consumer (SOCL) has outpaced all other segments over the past month rising 15.37%. Advanced Materials (REMX) also increased another 1.69% yesterday. No other segments gained more than 1% and Solar (TAN, -1.21%) was the only segment to fall more than 1% on the day. The KraneShares CSI China Internet ETF (KWEB) surged 5.86% on Tuesday, outgaining all other thematic ETFs. KWEB is up 38.38% in the last month and 85.71% of its holdings are currently trading above relative 50-day moving averages.

Commodities & Yields: U.S. Aggregate Bonds (DJP) decreased 36 bps, 20+ Year Treasury Bonds (TLT) dropped 1.17%, and the U.S. Dollar (UUP) added 17 bps. At Tuesday’s close, the U.S. 2-Year Treasury Yield stood at 4.488% and the U.S. 10-Year Treasury Yield stood at 3.757%. Broad Commodities (DJP) increased 88 bps as Energy (DBE) jumped 1.95%. WTI Crude Oil (USO) rose 2.18%, Nickel (JJN) gained 5.13%, and Silver (SLV) added 1.56%.

11.29.2022

Equities: As investors weighed protests in China over the country’s COVID policies, U.S. markets finished sharply lower on Monday. The S&P 500 (SPY) declined 1.60%, the NASDAQ 100 (QQQ) dipped 1.47%, and the Dow Jones Industrial Average (DIA) fell 1.46% while treasury yields were relatively flat. QQQ is now trading more than 7% below its 200-day moving average and just 2.33% above its 50-day moving average. Small-Caps were weak with the Russell 2000 (IWM) dropping 2.02%. Investors are also awaiting a speech by Federal Reserve Chairman Jerome Powell on Wednesday regarding the outlook for the economy and an update on the labor market. The next Fed meeting is scheduled for December 14 and there is a 67.5% chance of a 50-bps rate hike and a 32.5% chance of a 75-bps rate hike, according to the CME FedWatch Tool. All U.S. factor strategies were in the red with S&P 500 High Beta (SPHB, -2.05%) and S&P 500 Dividend (SPYD, -1.95%) hit the hardest. Emerging Markets (EEM) sunk just 45 bps as Taiwan (EWT) fell 1.97% and Developed ex-U.S. Markets (EFA, -1.29%) were impacted by weakness in Europe and South Korea (EWY, -1.78%).

Sectors: All U.S. sectors were lower on Monday with 4 sectors falling more than 2%: Real Estate (XLRE, -2.81%), Energy (XLE, -2.74%), Materials (XLB, -2.23%), and Technology (XLK, -2.14%). Industrials (XLI), Financials (XLF), and Communication Services (XLC) all declined more than 1.50% while Utilities (XLU) sunk 1.03%. XLC sits 37.37% below 52-week highs. On the industry level, Pharmaceuticals (XPH, +17 bps) was the lone industry in the green while Oil & Gas Exploration & Production (XOP, -3.67%) and Metals & Mining (XME, -3.16%) underperformed.

Themes: Clean Energy (PBW) and Cannabis (MJ) declined 4.74% and 4.54%, respectively, yesterday and were the worst performing thematic segments. All segments posted losses with Genomics (ARKG, -3.38%), Blockchain (BLOK, -2.81%) and Multi-Theme (ARKK, -2.81%) also lagging. BLOK now sits within 1.56% of 52-week lows and is approaching oversold territory. eSports & Video Games (ESPO, -57 bps) and Evolving Consumer (SOCL, -86 bps) were the only segments not to drop more than 1%. 

Commodities & Yields: Broad Commodities (DJP) dropped 79 bps as Precious Metals (DBP) sunk 1.17%. Gasoline (UGA) decreased 1.74%, Natural Gas (UNG) declined 1.50%, and Silver (SLV) fell 2.33%. U.S. Aggregate Bonds (AGG) dipped 16 bps, TIPS Bonds (TIP) declined 23 bps, and the U.S. Dollar (UUP) increased 73 bps. At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.453% and the U.S. 10-Year Treasury Yield stood at 3.687%.

11.28.2022

Equities: On Friday, U.S. markets were mixed on a shortened trading day. The Dow Jones Industrial Average (DIA) rose 46 bps while the NASDAQ 100 (QQQ) and the S&P 500 (SPY) declined 66 bps and 2 bps, respectively. All three major averages posted gains for the week with DIA adding 1.82%, SPY climbing 1.59%, and QQQ increasing 74 bps. This week, investors will be looking towards more earnings data, key manufacturing data, U.S. gross domestic product (GDP) results, a speech by Fed Chairman Jerome Powell, and the Employment Situation report. U.S. factor strategies were also mixed on Friday with growth oriented pockets of the markets underperforming. Last week, all factors were higher. S&P 500 Pure Value (RPV) added 2.50% on the week and outpaced S&P 500 Pure Growth (RPG) by 1.61%. Developed ex-U.S. Markets (EFA) rose 51 bps on Friday, lifted by Germany (EWG, +76 bps). Emerging Markets (EEM, -47 bps) were pulled lower by China (MCHI, -1.82%). EFA jumped 2.26% last week while EEM fell 68 bps. MCHI dropped 3.38% on the week as reports of COVID related deaths in the country swirled. 

Sectors: Real Estate (XLRE, +60 bps), Health Care (XLV, +59 bps), and Utilities (XLU, +58 bps) were the top performing U.S. sectors on Friday. Industrials (XLI) and Financials (XLF) both added more than 30 bps while Consumer Discretionary (XLY) and Consumer Staples (XLP) were both up over 5 bps. XLP is the only sector sitting in overbought territory. All other sectors saw losses. Technology (XLY) dipped 58 bps and lagged other sectors followed by Communication Services (XLC, -55 bps) and Energy (XLE, -37 bps). Semiconductors (XSD, -1.15%) was the worst performing industry on the day, dragging XLK lower. All sectors saw positive returns last week led by XLU, which surged 3.04%, and Materials (XLB), which climbed 2.98%.

Themes: Most thematic segments posted losses on Friday with Advanced Materials (REMX, -3.95%) falling the furthest. Evovling Consumer (SOCL) also declined 1.64% while NextGen Transporation (DRIV), Disruptive Tech (ARKW), and Multi-Theme (ARKK) were all down around 90 bps. Cannabis (MJ) was the best performing segment on the day, adding 1.24%. The KraneShares CSI China Internet ETF (KWEB) was the worst performing thematic ETF on Friday, plunging 4.42%. The majority of segments were in the green last week. Digital Infrastructure (SRVR), Wind (FAN), and Water (PHO) outperformed last week, all rising more than 2%. SOCL, ARKG, and ARKK all declined more than 1.50% on the week. 

Commodities & Yields: At Friday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.467% and the U.S. 10-Year Treasury Yield stood at 3.691%. The U.S. Dollar (UUP) was flat while U.S. Aggregate Bonds (AGG) added 2 bps and 20+ Year Treasury Bonds (TLT) decreased 34 bps. Broad Commodities (DJP) fell 1.26% with all broad-based sectors seeing losses. Natural Gas (UNG) dropped 3.45%, Gasoline (UGA) fell 3.38%, and Nickel (JJN) declined 3.76%.

11.23.2022

Equities: Despite mixed earnings results and reignited COVID fears in China, U.S. markets surged on Wednesday with the NASDAQ 100 (QQQ) climbing 1.44%, the S&P 500 (SPY) rising 1.35%, and the Dow Jones Industrial Average (DIA) adding 1.16%. Small-Caps (IJR) and Mid-Caps (IJH) were both up over 1% as well. The U.S. 10-Year Treasury Yield declined yesterday, nearing 3.75%. Best Buy jumped 11% yesterday on better-than-expected earnings results while Zoom Video and Dollar Tree reported disappointing results. Investors were rattled by the news of the first COVID deaths in China since May which prompted concerns over tighter restrictions just a week after the country began to ease some of its policies. The Federal Open Market Committee Minutes will be released after the close on Wednesday and the Fed Balance sheet will be released on Friday. All U.S. factor strategies posted gains led by S&P 500 High Beta (SPHB, +1.80%), S&P 500 Momentum (SPMO, +1.73%), and S&P 500 Pure Value (RPV). Developed ex-U.S. Markets (EFA) added 1.39% on stregnth from Japan (EWJ, +2.14%) and Australia (EWA, +1.55%) while Emerging Markets (EEM, +24 bps) benefitted from solid returns from Taiwan (EWT, +1.48%) and South Africa (EZA, +1.35%).

Sectors: All U.S. sectors finished higher on Wednesday with Energy (XLE, +3.13%) leading the charge. XLE was lifted by Oil & Gas Exploration & Production (XOP) and Oil & Gas Equipment & Services (XES) which rose 4.06% and 3.06%, respectively. XLE now sits within 1% from 52-week highs. Materials (XLB) increased 2.27% and received a boost from Metals & Mining (XME, +3.22%). Technology (XLK), Communication Services (XLC), Consumer Discretionary (XLY), and Financials (XLF) all gained more than 1% yesterday. Consumer Staples (XLP) added 73 bps and entered overbought territory. All industries saw positive returns except for Transportation (XTN) which dipped 3 bps.

Themes: The majority of global thematic segments were in the green yesterday with Advanced Materials (REMX, +1.85%) and Blockchain (BLOK, +1.81%) outperforming. Casinos & Gaming (BETZ, +1.78%), Wind (FAN, +1.67%), Biotech (SBIO, +1.63%), and Connectivity (FIVG, +1.54%) all posted solid returns. Only three segments saw losses on the day: Cannabis (MJ, -54 bps), Genomics (ARKG, -38 bps), and Space (UFO, -30 bps). Solar (TAN) added 84 bps and now sits within 10% of 52-week highs. Solar (TAN), Digital Infrastructure (GRID), and Water (PHO) are the only segments currently trading above relative 50-day and 200-day moving averages. The KraneShares CSI China Internet ETF (KWEB) underperformed other thematic ETFs yesterday, falling 1.92%.

Commodities & Yields: At Wednesday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.357% and the U.S. 10-Year Treasury Yield stood at 3.767%. The U.S. Dollar (UUP) declined 62 bps while U.S. Aggregate Bonds (AGG) added 52 bps and 20+ Year Treasury Bonds (TLT) increased 1.42%. Broad Commodities (DJP) rose 1.34% on the day with all broad-based sectors seeing gains. Natural Gas (UNG) jumped 4.86%, Gasoline (UGA) rose 3.30%, and Nickel (JJN) climbed 4.07%.

11.22.2022

Equities: U.S. markets retreated on Monday to kick off the short holiday week as treasury yields increased slightly. The NASDAQ 100 (QQQ) and the S&P 500 (SPY) declined 1.03% and 36 bps, respectively, while the Dow Jones Industrial Average (DIA) dipped just 9 bps. DIA received a boost from Disney (1.79% weight) which surged nearly 7% yesterday following the surprise news that former CEO Bob Iger would return to the same role of the company. QQQ is now trading more than 8% below its 200-day moving average. Growth-oriented pockets of the markets were weak with S&P 500 High Beta (SPHB, -1.14%) and S&P 500 Growth (SPYG, -97 bps) lagging other U.S. factor strategies yesterday. S&P 500 Low Volatility (SPLV) was the best performing factor, rising 86 bps. Year-to-date, SPYG has lagged S&P 500 Value (SPYV) by nearly 23%. Emerging Markets (EEM) sunk 1.26% as China (MCHI, -1.66%) was shaken by reports of the first COVID related deaths in the country since May which reignited lockdown fears. Developed ex-U.S. Markets (EFA) dropped 75 bps on underperformance from South Korea (EWY, -2.74%) and Hong Kong (EWH, -1.23%).

Sectors: U.S. sectors saw mixed returns yesterday led by Consumer Staples (XLP, +95 bps) and Real Estate (XLRE, +71 bps). Utilities (XLU) rose 45 bps while Materials (XLB), Industrials (XLI), and Financials (XLF) all added around 30 bps. XLP and XLI are each trading within 7% of 52-week highs. Consumer Discretionary (XLY) was the worst performing sector, sinking 1.45%. Energy (XLE) declined 1.35% and Technology (XLK) fell 1.07%. Semiconductors (XSD, -2.40%) and Internet (XWEB, -1.63%) pulled XLK lower. XSD is still up nearly 15% over the past month. Oil & Gas Equipment & Services (XES) dropped 2.87% and Oil & Gas Exploration & Production (XOP) decreased 1.90%, impacting XLE. 

Themes: Just four thematic segments posted positive returns yesterday, each gaining less than 1%: Digital Infrastructure (SRVR), Water (PHO), Cyber Security (HACK), and Advanced Materials (REMX). Disruptive Tech (ARKW, -3.97%) and Multi-Theme (ARKK, -3.72%) dropped the furthest. Evolving Consumer (SOCL), Blockchain (BLOK), Industrial Revolution (ARKQ), eSports & Video Games (ESPO), Online Retail (IBUY), Casinos & Gaming (BETZ), and FinTech (FINX) all declined more than 2%. Blockchain (BLOK) now sits just 12 bps above 52-week lows and has declined more than 60% thus far in 2022.

Commodities & Yields: Broad Commodities (DJP) finished higher by 41 bps. Natural Gas (UNG) surged nearly 6%, Tin (JJT) decreased 6.52%, and Gold (GLD) declined 56 bps. The U.S. Dollar (UUP) increased 87 bps, U.S. Aggregate Bonds (AGG) dipped 6 bps, and TIPS Bonds (TIP) rose 53 bps. At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.561% and the U.S. 10-Year Treasury Yield stood at 3.829%.

11.21.2022

Equities: On Friday, the Dow Jones Industrial Average (DIA) added 58 bps and the S&P 500 (SPY) gained 45 bps while the NASDAQ 100 (QQQ) was flat. Investors weighed tougher rhetoric from Federal Reserve officials last week and mixed earnings results. Existing home sales data released Friday also indicated home sales declined for the 9th consecutive month in October and are down more than 28% year-over-year. Last week, QQQ finished down 1.09% and SPY dropped 62 bps while DIA increased 8 bps. This week, investors will be looking towards key consumption data and the FOMC minutes released on Wednesday along with the Fed balance sheet released on Friday. S&P 500 Low Volatility (SPLV, +1.36%) and S&P 500 Dividend (SPYD, +97 bps) led other U.S. factor strategies on Friday. Most factors finished the week lower with S&P 500 High Beta (SPHB) declining 3.09% and S&P 500 Pure Growth (RPG) decreased 1.78%. Developed ex-U.S. Markets (EFA) rose 20 bps on Friday despite underperformance from Hong Kong (EWH, -1.62%). Emerging Markets (EEM, -58 bps) were pulled lower by China (MCHI, -2.76%). EFA and EEM both declined around 40 bps last week while MCHI jumped 2.78%. 

Sectors: Energy (XLE, -79 bps) and Communication Services (XLC, -30 bps) were the only U.S. sectors to see negative returns on Friday. XLE was dragged lower by Oil & Gas Equipment & Services (XES, -1.30%) and Oil & Gas Exploration & Production (XOP, -1.11%). XLC sits just 9.07% from 52-week lows. Utilities (XLU) climbed 2.12% on Friday, handily otupacing other sectors. Real Estate (XLRE), Health Care (XLV), and Consumer Staples (XLP) were all up more than 1% while Financials (XLF) and Industrials (XLI) added around 80 bps. Telecom (XTL, +2.31%) was the top performing industry on the day. Last week, XLP, XLU, and XLV were the only sectors to post gains, all rising more than 1%. Consumer Discretionary (XLY) lagged other sectors last week, falling 2.83%. XLY is the only sector currently trading below its 50-day and 200-day moving averages.

Themes: Global themes were mixed on Friday with just two thematic segments adding more than 1%: Water (PHO, +1.28%) and Connectivity (FIVG, +1.06%). Biotech (SBIO) and Smart Infrastructure (GRID) gained 88 bps and 84 bps, respectively. Cannabis (MJ, -2.41%) and Evolving Consumer (SOCL, -2.19%) saw the worst returns on Friday followed by Disruptive Tech (ARKW, -1.92%). Genomics (ARKG), Big Data (AIQ), Multi-Theme (ARKK), and Online Retail (IBUY) all declined around 1.50%. Only three segments finished in the green last week: Solar (TAN) rose 2.55%, Smart Infrastructure (GRID) added 44 bps, and Evolving Consumer (SOCL) increased 31 bps. Advanced Materials (REMX) and Multi-Theme (ARKK) both dropped more than 9% for the week while Genomics (ARKG) plunged nearly 11%. 

Commodities & Yields: U.S. Aggregate Bonds (AGG) dipped 14 bps, 20+ Year Treasury Bonds (TLT) dropped 69 bps, and the U.S. Dollar (UUP) was up 28 bps on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.531% and the U.S. 10-Year Treasury Yield stood at 3.821%. Broad Commodities (DJP) declined 49 bps as WTI Crude Oil (USO) decreased 1.58%, Gasoline (UGA) dropped 2.06%, and Precious Metals (DBP) sunk 50 bps.

11.18.2022

Equities: U.S. markets were mixed on Thursday as investors weighed comments from St. Louis Fed President James Bullard and surging treasury yields. The S&P 500 (SPY) and the NASDAQ 100 (QQQ) declined 31 bps and 22 bps, respectively, while the Dow Jones Industrial Average (DIA) was up 1 bps. Small-Caps lagged with the Russell 2000 (IWM) sinking 93 bps. In a speech yesterday, Bullard, a voting member of the Federal Open Market Committee, indicated that the rate hikes by the Federal Reserve have had limited impacts on inflation and that the central bank still has a lot of work to do before inflation is under control. The comments sent the U.S. 2-Year Treasury back above 4.45% and the U.S. 10-Year Treasury Yield back above 3.75%. Gap Inc was the latest retailer to report earnings, posting revenue figures that were above estimates. The company also provided a cautious outlook for the upcoming holiday season similar to many other retailers. S&P 500 Momentum (SPMO, +45 bps) and S&P 500 Quality (SPHQ, +11 bps) were the only factor strategies to post gains on Thursday while growth-oriented pockets of the markets were weak. S&P 500 Pure Growth (RPG, -1.02%) and S&P 500 High Beta (SPHB, -87 bps) underperformed other factors. Developed ex-U.S. Markets (EFA) were relatively flat and Emerging Markets (EEM, +18 bps) were lifted by China (MCHI, +1.82%).

Sectors: On Thursday, all U.S. sectors saw losses except for Energy (XLE, +22 bps) and Technology (XLK, +13 bps). Semiconductors (XSD) added another 94 bps, lifting XLK. Currently, XLE is trading nearly 11% above its 50-day moving average and almost 18% above its 200-day moving average. Utilities (XLU, -1.75%) and Consumer Discretionary (XLY, -1.21%) were the worst performing sectors on the day. XLY sits within 7% of 52-week lows. Materials (XLB) dropped 96 bps, Real Estate (XLRE) fell 90 bps, and Communication Services (XLC) sunk 76 bps. Health Care (XLV) and Consumer Staples (XLP) were both down around 5 bps. On the industry level, Internet (XWEB, -2.80%) and Software & Services (XSW, -2.27%) lagged.

Themes: Solar (TAN) outshined other thematic segments yesterday rising 1.32%. Only three other segments finished the green: Cannabis (MJ, +34 bps), Connectivity (FIVG, +32 bps), and Evolving Consumer (SOCL, +5 bps). Meanwhile, Genomics (ARKG, -2.64%) saw the largest declines. Advanced Materials (REMX), Disruptive Tech (ARKW), Cloud Computing (SKYY), and Multi-Theme (ARKK) all decreased more than 2%. Smart Infrastructure (GRID) was relatively flat on the day and is the only segment sitting in overbought territory. The KraneShares CSI China Internet ETF (KWEB) climbed another 3.85% and was the best performing thematic ETF on Thursday. KWEB is up nearly 12% this week. 

Commodities & Yields: At Thursday's closing bell, the U.S. 2-Year Treasury Yield stood at 4.454% and the U.S. 10-Year Treasury Yield stood at 3.777%. The U.S. Dollar (UUP) rose 38 bps, U.S. Aggregate Bonds (AGG) dipped 42 bps, and 20+ Year Treasury Bonds (TLT) dropped 1.06%. Broad Commodities (DJP) finished down 1.18% as all broad-based sectors declined. Energy (DBE, -2.30%) was pulled lower by WTI Crude Oil (USO, -2.64%) and Gasoline (UGA, -2.25%).

11.17.2022

Equities: Following Tuesday’s gains, major averages slipped on Wednesday as Target plunged on weak earnings results, which impacted retail companies. The NASDAQ 100 (QQQ) declined 1.36% while the S&P 500 (SPY) and the Dow Jones Industrial Average (DIA) dropped 76 bps and 4 bps, respectively. Target declined 13% on the day as it slashed its 4^th quarter outlook and reported a 50% decline in profits for the 3^rd quarter. Retail Sales results published Wednesday increased slightly indicating consumers continue to be willing to spend despite higher prices, lifting investor sentiment. Housing Starts & Permits results will be released on Thursday and Existing Home Sales data will be released on Friday. The U.S. 10-Year Treasury yield declined slightly while the U.S. 2-Year Treasury Yield was relatively flat. S&P 500 Low Volatility (SPLV, +50 bps) was the lone U.S. factor strategy to see positive returns while growth-oriented pockets of the markets were shaken. S&P 500 High Beta (SPHB, -2.75%) and S&P 500 Pure Growth (RPG, -1.66%) were the worst performing factors. Developed ex-U.S. Markets (EFA) dropped just 23 bps as South Korea (EWY) declined 2.97%. Emerging Markets (EEM, -1.60%) were pulled lower by Brazil (EWZ, -3.85%).

Sectors: Utilities (XLU) climbed 90 bps and Consumer Staples (XLP) gained 49 bps while all other U.S. sectors posted losses yesterday. Energy (XLE) underperformed, falling 2.04%, and Consumer Discretionary (XLY) and Technology (XLK) were both down more than 1%. Communication Services (XLC, -99 bps) and Materials (XLB, -97 bps) were also weak. Internet (XWEB, -4.61%) and Semiconductors (XSD, -4.47%) pulled XLK lower. Retail (XRT) also underperformed other industries, declining 3.72%. Insurance (KIE, +37 bps) was the only industry to finish up on the day. Currently, Health Care (XLV), Industrials (XLI), and XLP all sit within 10% of relative 52-week highs. XLY is the only sector trading below its 50-day moving average.

Themes: A sea of red for global thematic segments on Wednesday with Multi-Theme (ARKK) and Disruptive Tech (ARKW) both falling more than 5%. Online Retail (IBUY) and FinTech (FINX) both sunk more than 4% while Cloud Computing (SKYY), Genomics (ARKG), Blockchain (BLOK), Clean Energy (PBW), Digital Payments (IPAY), and Industrial Revolution (ARKQ) all declined more than 3%. Smart Infrastructure (GRID) was the best performing segment, dipping just 14 bps. Only two thematic ETFs saw gains yesterday: the AdvisorShares Pure US Cannabis ETF (MSOS, +1.82%) and the Invesco Global Water ETF (PIO, +39 bps). Both MSOS and PIO are approaching overbought territory.

Commodities & Yields: U.S. Aggregate Bonds (AGG) rose 62 bps, 20+ Year Treasury Bonds (TLT) jumped 2.19%, and the U.S. Dollar (UUP) fell 21 bps on Wednesday. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 4.363% and the U.S. 10-Year Treasury Yield stood at 2.686%. Broad Commodities (DJP) declined 1.00% as all broad-based sectors were in the red. Industrial Metals (DBB) dropped 1.70% and Energy (DBE) dipped 1.08%. Nickel (JJN) plunged 9.90%, WTI Crude Oil (USO) decreased 1.65%, and Natural Gas (UNG) increased 1.62%.