ETF Action: Research

4.18.2024

Equities: U.S. equity markets finished lower yesterday with the NASDAQ 100 (QQQ) declining 1.22%, the S&P 500 (SPY) falling 59 bps, and the Dow Jones Industrial Average (DIA) dipping 14 bps. All three major average are approaching oversold territory and are now trading more than 2% below relative 50-day moving averages. Mid-Caps (IJH) and Small-Caps (IJR) also dropped more than 80 bps. According to the latest Beige Book report filed Wednesday, the U.S. economy grew “slightly” over the past six weeks while price increases moved at a “modest” pace and employment showed “slight” gains as well. The Federal Reserve also noted that consumer spending “barely increased”, that home sales “strengthened” across most areas, and characterized the economic outlook as “cautiously optimistic.” Earnings wise, United Airlines surged more than 17% on the day after posting a narrower-than-expected loss and beating on revenue while J.B. Hunt Transport Services dropped more than 8% after missing analysts’ expectations on the top and bottom lines. Existing Home Sales figures and Jobless Claims data will be released on Thursday along with a slew of speeches from Federal Reserve officials.

U.S. factor strategies were mixed on Wednesday. S&P 500 High Dividend Low Volatility (SPHD) was up 62 bps while S&P 500 Dividend (SPYD) and S&P 500 Pure Value (RPV) rose around 50 bps. Growth-oriented pockets of the markets lagged once again with S&P 500 Pure Growth (RPG) sinking 1.37% and S&P 500 Momentum (SPMO) declining 1.22%. S&P 500 Growth (SPYG) also dipped 97 bps and S&P 500 Quality (SPHQ) slipped 95 bps. Developed ex-U.S. Markets (EFA) added 7 bps, buoyed by Australia (EWA, +1.12%). The Netherlands (EWN) and Japan (EWJ) both sank more than 1%. Emerging Markets (EEM, -8 bps) were pulled lower by Thailand (THD, -1.42%).

Sectors: Just 4 of the 11 U.S. sectors registered positive returns yesterday with Utilities (XLU) popping 2.09%. Consumer Staples (XLP) rose 37 bps while Financials (XLF) and Materials (XLB) both increased just over 20 bps. Technology (XLK) underperformed, falling 1.44% on weakness from Semiconductors (XSD, -2.18%). Real Estate (XLRE) also declined 83 bps, Consumer Discretionary (XLY) dropped 48 bps, and Energy (XLE) sank 29 bps. Health Care (XLV, -17 bps) and Communication Services (XLC, 9 bps) saw modest losses on the day. XLU and XLE are the only sectors trading above relative 50-day and 200-day moving averages.

Themes: Most global thematic segments were in negative territory on Wednesday with Genomics (ARKG, -2.20%) falling the furthest. Connectivity (FIVG), Multi-Theme (ARKK), Space (UFO), Industrial Revolution (ARKQ), Big Data (AIQ), Disruptive Tech (ARKW), Casinos & Gaming (BETZ), Blockchain (BLOK), and Cyber Security (HACK) were all down more than 1%. Advanced Materials (REMX) and Cannabis (MJ) were the best performing segments, climbing 1.78% and 1.35%, respectively. Solar (TAN, +91 bps) also rose off 52-week highs. The Amplify U.S. Alternative Harvest ETF (MJUS) and the AdvisorShares Pure US Cannabis ETF (MSOS) both jumped more than 6% on the day.

Commodities & Yields: At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 4.932% and the U.S. 10-Year Treasury Yield stood at 4.859%. The U.S. Dollar (UUP) slipped 31 bps, U.S. Aggregate Bonds (AGG) increased 46 bps, and 20+ Year Treasury Bonds gained 1.11%. Broad Commodities (DJP, -77 bps) were pulled lower by Energy (DBE), which sank 2.65%. WTI Crude Oil (USO) and Gasoline (UGA) were both down around 3%.  Agriculture (DBA) and Industrial Metals (DBB) were both up around 1.30%.

4.17.2024

Equities: Mixed session for U.S. equity markets on Tuesday as investors digested fresh commentary from Federal Reserve Chairman Jerome Powell. The Dow Jones Industrial Average (DIA) advanced 18 bps and the NASDAQ 100 (QQQ) added 1 bps while the S&P 500 (SPY) declined 18 bps. Powell stated yesterday that the U.S. economy, while otherwise strong, has not seen inflation come back to the central bank’s goal, pointing to the further likelihood that interest rates will not be cut any time soon. Since July 2023, the Fed has kept its benchmark interest rate in a target range between 5.25%-5.5%, the highest in 23 years. That was the result of 11 consecutive rate hikes that began in March 2022. The U.S. 2-Year spiked above 5.0% and the U.S. 10-Year jumped near 4.70% intraday following the remarks. In other economic news, industrial production rose 0.4% in March but fell 1.8% in Q1 while housing starts and building permits both missed expectations. On the earnings front, Morgan Stanley posted stronger-than-expected earnings and revenue results while Bank of America reported that profit fell 18% from the previous year and revenue slipped 1.6%. Johnson & Johnson reported mixed results and UnitedHealth handily topped revenue expectations for the quarter. Investors will be looking towards the release of the Beige Book on Wednesday in addition to a handful of speeches from Fed officials.

Just 3 U.S. factor strategies were in the green yesterday: S&P 500 Pure Growth (RPG, +17 bps), S&P 500 Growth (SPYG, +3 bps), and S&P 500 Quality (SPHQ, +2 bps). S&P 500 Dividend (SPYD) and S&P 500 Enhanced Value (SPVU) both around 1.20% while S&P 500 Pure Value (RPV) decreased 92 bps. Emerging Markets (EEM, -1.32%) were dragged lower by Indonesia (EIDO, -2.93%), Mexico (EWW, -2.51%), Brazil (EWZ, -2.37%), and Taiwan (EWT, -2.27%). Developed ex-U.S. Markets (EFA) tumbled 99 bps on weakness from Australia (EWA, -2.06%), Hong Kong (EWH, -1.87%), and South Korea (EWY, -1.56%). EFA and EEM are approaching oversold territory.

Sectors: Real Estate (XLRE) underperformed other U.S. sectors once again on Tuesday, slipping 1.53%. XLRE entered oversold territory and has fallen 7% in the past month. Utilities (XLU) declined 1.32%, Energy (XLE) dropped 87 bps, and Materials (XLB) slid 77 bps. Financials (XLF, -68 bps) and Consumer Discretionary (XLY, -57 bps) were also weak. XLF was impacted by Banks (KBE) and Regional Banks (KRE), which both decreased more than 1.25%. Technology (XLK) gained 12 bps. Consumer Staples (XLP) and Health Care (XLV) were the only other sectors in positive territory on the day, each adding 4 bps.

Themes: Global themes continued to lag broader markets yesterday with just 3 segments posting modest gains: eSports & Video Games (ESPO, +13 bps), Cloud Computing (SKYY, +12 bps), and Connectivity (FIVG, +12 bps). Genomics (ARKG) and Advanced Materials (REMX) were the worst performing segments, slipping 3.17% and 2.94%, respectively. Solar (TAN, -2.12%) and Clean Energy (PBW, -1.81%) each hit fresh 52-week lows while Digital Infrastructure (SRVR, -1.78%) continued to fall further into oversold territory and Multi-Theme (ARKK) declined 1.64%. Cannabis (MJ) is the only segment trading above its 50-day moving average.

Commodities & Yields: Broad Commodities (DJP) fell 40 bps on Tuesday as Agriculture (DBA) tumbled 2.30% and Industrial Metals (DBB) dropped 91 bps. Soybean (SOYB), Sugar (CANE), and Copper (CPER) were all down more than 1% and Silver (SLV) decreased 2.31%. U.S. Aggregate Bonds (AGG) sank 28 bps, 20+ Year Treasury Bonds (TLT) retreated 66 bps, and the U.S. Dollar (UUP) added 14 bps. At yesterday’s closing bell, the U.S. 2-Year Treasury Yield stood at4.964% and the U.S. 10-Year Treasury Yield stood at 4.657%.

4.16.2024

Equities: After another losing week last week, U.S. equity markets continued to push lower on Monday with the NASDAQ 100 (QQQ) slipping 1.65%, the S&P 500 (SPY) falling 1.25%, and the Dow Jones Industrial Average (DIA) retreating 65 bps. Small-Caps (IJR) and Mid-Caps (IJH) were also down around 1%. Markets faced pressure from stubborn treasury yields that continue to rise. The U.S. 2-Year advanced above 4.95% while the U.S. 10-Year jumped above 4.65% intraday yesterday. The Commerce Department reported on Monday that retail sales increased 0.7% month-over-month in March, well above the +0.3% estimate but below the upwardly revised +0.9% February figure. Year-over-year, sales rose 4.0%. The results indicate that consumers more than kept up with the pace of inflation as the Consumer Price Index (CPI) increased 3.5% for the year. Separately, Salesforce declined more than 7% yesterday following reports that the software company was in talks to acquire data management firm Informatica. Goldman Sachs climbed almost 3% on the day after topping earnings and revenue expectations. Revenue jumped 16% from the previous year to $14.21 billion, topping analysts’ estimates by more than $1 billion. On Tuesday, Housing Starts & Permits data will be released and Fed Chair Jerome Powell is scheduled to speak.

Growth-oriented pockets of the markets underperformed yesterday with S&P 500 Growth (SPYG) sliding 1.79%, S&P 500 Pure Growth (RPG) dropping 1.66%, and S&P 500 Momentum (SPMO) declining 1.51%. All other U.S. factor strategies were also in the red. S&P 500 Enhanced Value (SPVU) dipped just 18 bps. Emerging Markets (EEM) decreased 64 bps as South Africa (EZA) fell 1.59%. Taiwan (EWT) and Brazil (EWZ) were both down 1.47% as well while Mexico (EWW) dipped 1.31%. Developed ex-U.S. Markets (EFA) sank 30 bps, pulled lower by Hong Kong (EWH, -1.39%) and Australia (EWA, -71 bps).

Sectors: Technology (XLK) and Real Estate (XLRE) were the worst performing U.S. sectors on Monday, sinking 1.90% and 1.75%, respectively. XLK was impacted by Software & Services (XSW, -5.53%) and Semiconductors (XSD, -4.02%) while XLRE was dragged lower by Homebuilders (XHB, -2.61%). XLRE is the only sector trading below its 50-day and 200-day moving average and is nearing oversold territory. Consumer Discretionary (XLY) also dropped 1.67% and Communication Services (XLC) slipped 1.27% while Energy (XLE) and Utilities (XLU) both fell more than 90 bps. Health Care (XLV) saw the best returns on the day, dipping 20 bps.

Themes: All global thematic segments finished in negative territory on Monday with most dropping more than 1.50%.  Multi-Theme (ARKK, -4.58%) and Disruptive Tech (ARKW, -4.33%) fell the furthest. Blockchain (BLOK) was down 3.93%, Genomics (ARKG) declined 3.86%, and Solar (TAN) dipped 3.31%. TAN hit fresh 52-week lows while ARKG entered oversold territory, joining Digital Infrastructure (SRVR, -1.52%) and Space (UFO, -2.29%). Clean Energy (PBW) also decreased 2.66% to new 52-week lows. Online Retail (IBUY), Cyber Security (HACK), Cloud Computing (SKYY), and Industrial Revolution (ARKQ) were all down more than 2.35%. Water (PHO) dipped 61 bps and was the top performing segment.

Commodities & Yields: The U.S. Dollar (UUP) added 17 bps, U.S. Aggregate Bonds (AGG) declined 60 bps, and Preferred & Income Securities (PFF) dropped 1.71% yesterday. At Monday’s close, the U.S. 2-Year Treasury Yield stood at 4.938% and the U.S. 10-Year Treasury Yield stood at 4.606%. Broad Commodities (DJP) gained 59 bps, bolstered by Industrial Metals (DBB, +1.44%) and Precious Metals (DBP, +2.03%). Silver (SLV) added 3.04%, Gold (GLD) rose 1.87%, and Copper (CPER) jumped 2.40%. Natural Gas (UNG) fell 5.04%.

4.15.2024

Equities: U.S. equity markets tumbled on Friday with the NASDAQ 100 (QQQ) slipping 1.59%, the S&P 500 (SPY) falling 1.38%, and the Dow Jones Industrial Average (DIA) declining 1.21%. All three major averages finished lower last week as DIA dropped 2.31%, SPY decreased 1.46%, and QQQ dipped 50 bps. Small-Caps (IJR) and Mid-Caps (IJH) were also down more than 1.50% on Friday and sank around 2.90% last week. JPMorgan Chase retreated more than 6% on Friday after reporting that net interest income, a key measure of what it makes through lending activities, could be a little short of what Wall Street analysts are expecting in 2024. CEO Jamie Dimon also warned about persistent inflationary pressures weighing on the economy. According to the University of Michigan’s consumer sentiment index, consumers are also growing worried about the persistent inflationary pressures. The index came in at 77.9 for April, which is below the 79.9 consensus estimate. Year-ahead and long-run inflation expectations also ticked up, reflecting frustrations over sticky inflation. This week, investors will be looking towards Retail Sales data, Housing Starts & Permits figures. The Industrial Production report, and Existing Home Sales results. Fed Chairman Jerome Powell will also speak on Tuesday.

All U.S. factor strategies were in the red on Friday and for last week. S&P 500 Low Volatility (SPLV, -79 bps) was the only factor to decline less than 1% On Friday while S&P 500 High Beta (SPHB) slid 2.40% and S&P 500 Pure Growth (RPG) dropped 2.04%. S&P 500 Pure Value (RPV) was the worst performing factor last week, slipping nearly 4%. Most factors were down more than 2% for the week. Developed ex-U.S. Markets (EFA) retreated 1.62% on Friday as South Korea (EWY) and Hong Kong (EWH) both sank more than 3%. Emerging Markets (EEM, -2.29%) were pulled lower by China (MCHI, -3.11%) and South Africa (EZA, -2.70%). EEM and EFA both fell around 2% last week.

Sectors: Utilities (XLU, -76 bps) was the only U.S. sector to sink less than 1% on Friday. Materials (XLB) saw the worst returns, slipping 1.77%. Communication Services (XLC), Energy (XLE, -1.63%), Consumer Discretionary (XLY), and Technology (XLK) all fell more than 1.60% while Health Care (XLV) dropped 1.49% and Financials (XLF) declined 1.33%. XLV was dragged lower by Biotech (XBI, 3.43%) and Pharmaceuticals (XPH, -3.00%). XLV also entered oversold territory and is now trading more than 4% below its 50-day moving average. All sectors posted losses last week with XLF, XLB, and XLV all decreasing more than 3%. XLK dipped just 50 bps on the week.

Themes: All global thematic segments were down more than 1% on Friday. Cannabis (MJ) underperformed, plunging 4.99%, while Advanced Materials (REMX) and Clean Energy (PBW) each declined more than 4%. PBW hit new 52-week lows. Solar (TAN), Blockchain (BLOK), Multi-Theme (ARKK), Genomics (ARKG), Disruptive Tech (ARKW), Biotech (SBIO), and 3D Printing (PRNT) all dropped more than 3% on the day. All segments were in negative territory last week. MJ plummeted more than 11% for the week and PBW, Casinos & Gaming (BETZ), and BLOK all fell more than 4%. Most segments have also seen negative returns in the past month with ARKG retreating more than 12%.

Commodities & Yields: The U.S. Dollar (UUP) rose 80 bps, U.S. Aggregate Bonds (AGG) added 19 bps, and 20+ Year Treasury Bonds (TLT) gained 53 bps on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.882% and the U.S. 10-Year Treasury Yield stood at 4.499%. Broad Commodities (DJP) dipped 2 bps on the day as Gold (GLD) fell 1.32%, Silver (SLV) dropped 1.46%, and Sugar (CANE) declined 2.30%. Corn (CORN) was also up 1.22%.

4.12.2024

Equities: As investors digested March’s Producer Price Index (PPI) results, U.S. equity markets were higher on Thursday with the NASDAQ 100 (QQQ) climbing 1.60% to new 52-week highs and the S&P 500 (SPY) advancing 76 bps. The Dow Jones Industrial Average (DIA) inched higher by just 1 bps while Small-Caps (IJR) added 43 bps and Mid-Caps (IJH) rose 5 bps. The Labor Department reported yesterday that the PPI, a measure of inflation at the wholesale level, increased 0.2% for the month, less than the +0.3% consensus estimate. However, on a 12-month basis, the PPI rose 2.1%, the biggest gain since April 2023, indicating pipeline pressures that could keep inflation elevated. Excluding food and energy, the core PPI also rose 0.2% for the month and 2.4% for the year. Treasury yields were steady on Thursday with the U.S. 2-Year hovering around 4.95% and the U.S. 10-Year trading above 4.55% intraday. Separately, initial filings for jobless benefits dropped 11K from the previous week to 211K, which was below the 217K estimate. On Friday, investors will be looking towards Import & Export Prices figures along with Consumer Sentiment data. Several banks will report earnings Friday, including JPMorgan Chase, Wells Fargo, Citigroup, BlackRock, and State Street.

Most U.S. factor strategies saw negative returns yesterday with S&P 500 Value + Momentum (SPVM) dropping 96 bps. S&P 500 Enhanced Value (SPVU) and S&P 500 Low Volatility (SPLV) both slipped more than 80 bps. Growth-oriented pockets of the markets outperformed with S&P 500 Momentum (SPMO), S&P 500 Growth (SPYG), and S&P 500 Pure Growth (RPG) all gaining more than 1.40%. Emerging Markets (EEM) increased 61 bps as South Africa (EZA) jumped 1.40% and China (MCHI) rose 77 bps. Developed ex-U.S. Markets (EFA, +27 bps) were lifted by South Korea (EWY, +2.48%) and Japan (EWJ, +88 bps).

Sectors: Technology (XLK) surged 2.00% on Thursday and outpaced other U.S. sectors. XLK was bolstered by Semiconductors (XSD, +2.34%). Communication Services (XLC) and Consumer Discretionary (XLY) each climbed more than 80 bps while Industrials (XLI) and Real Estate (XLRE) each added 11 bps. XLC sits just 14 bps from new 52-week highs. Financials (XLF) lagged, falling 71 bps as Insurance (KIE) declined another 2.71%. Health Care (XLV) dropped 41 bps, Consumer Staples (XLP) sank 24 bps, and Utilities (XLU) retreated 20 bps. XLV continues to move closer to oversold territory.

Themes: Biotech (SBIO, +2.01%) was the top performing global thematic segment yesterday. Most segments were in the green with Connectivity (FIVG), Big Data (AIQ), Multi-Theme (ARKK), and Disruptive Tech (ARKW) all rising around 1.50%. Advanced Materials (REMX), Biotech (SBIO), Online Retail (IBUY), Industrial Revolution (ARKQ), and Cloud Computing (SKYY) were all up more than 1%. Cannabis (MJ) declined 99 bps on the day but is still up more than 25% over the past month. Solar (TAN) was down 66 bps while Clean Energy (PBW) and 3D Printing (PRNT) both sank around 30 bps.

Commodities & Yields: U.S. Aggregate Bonds (AGG) added 2 bps, 20+ Year Treasury Bonds (TLT) declined 45 bps, and the U.S. Dollar (UUP) increased 7 bps yesterday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.965% and the U.S. 10-Year Treasury Yield stood at 4.593%. Broad Commodities (DJP) dropped 26 bps as Natural Gas (UING) slipped 5.23%, Gold (GLD) popped 1.94%, and Wheat (WEAT) decreased 1.48%.

4.11.2024

Equities: Following a hotter-than-expected Consumer Price Index (CPI) report, equity markets finished sharply lower on Wednesday. The Dow Jones Industrial Average (DIA) declined 1.11%, the S&P 500 (SPY) fell 1.00%, and the NASDAQ 100 (QQQ) sank 87 bps. Mid-Caps (IJH) also dropped 2.03% while Small-Caps (IJR) retreated nearly 3%. The Labor Department reported yesterday that the core CPI rose 0.4% month-over-month and 3.5% year-over-year in March, bot figures were above estimates. Core CPI, which excludes volatile food and energy prices, increased 0.4% on the month and 3.8% for the year. Energy rose 1.1% last month after climbing 2.3% in February, while shelter costs, which make up about one third of the weighting in the CPI, were higher by 0.4% on the month and up 5.7% from a year ago. The U.S. 2-Year Treasury Yield jumped up near 5% and the U.S. 10-Year Treasury Yield surged above 4.55% intraday Wednesday after the results. The probability of a rate cut at the June meeting now stands at 19.5% and the probability of a rate cut at the July meeting now stands at 42.8%, according to the CME FedWatch Tool. The minutes for the March Federal Open Market Committee (FOMC) meeting were also released yesterday and indicated that officials remained uncertain about the persistence of high inflation. Several members expressed the view that recent data had not increased their confidence that inflation was moving sustainably down to 2%. All eyes will now be on Thursday’s Producer Price Index (PPI) report.

No U.S. factor strategies were in positive territory yesterday with most factors falling more than 1%. S&P 500 High Beta (SPHB) slumped 2.83%, S&P 500 Dividend (SPYD) dipped 2.66%, and S&P 500 Pure Value (RPV) dropped 2.05%. Developed ex-U.S. Markets (EFA) and Emerging Markets (EEM) were both down around 1.35% on the day. EFA was impacted by weakness from South Korea (EWY, -3.83%), Australia (EWA, -2.25%), and Japan (EWJ, -1.56%). EEM was pulled lower by Brazil (EWZ, -2.76%), South Africa (EZA, -2.50%), and Mexico (EWW, -1.96%). 

Sectors: Energy (XLE) was the lone U.S. sector in the green on Wednesday, adding 31 bps. XLE was lifted by Oil & Gas Equipment & Services (XES, +67 bps) and Oil & Gas Exploration & Production (XOP, +34 bps), the only industries to see gains for the day. Real Estate (XLRE) plummeted 4.11% as Homebuilders (ITB) retreated 3.71%. Utilities (XLU) also declined 1.71% while Materials (XLB), Consumer Discretionary (XLY), and Financials (XLF) were all down around 1.50%. XLF was impacted by sizeable losses from Regional Banks (KRE, -4.96%) and Banks (KBE, -4.14%). Technology (XLK, -1.23%) and Health Care (XLV, -1.17%) also underperformed.

Themes: All global thematic segments posted losses yesterday with Genomics (ARKG, -4.54%) falling the furthest. Clean Energy (PBW), Solar (TAN), Digital Infrastructure (SRVR), and Cannabis (MJ) all declined more than 3% while Multi-Theme (ARKK), Casinos & Gaming (BETZ), FinTech (FINX), Industrial Revolution (ARKQ), Advanced Materials (REMX), Wind (FAN), NextGen Transportation (DRIV), and Online Retail (IBUY) all dropped more than 2%. Blockchain (BLOK) was the best performing segment of the day, adding 41 bps. SRVR and ARKG are approaching oversold territory.

Commodities & Yields: At Wednesday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.971% and the U.S. 10-Year Treasury Yield stood at 4.550%. The U.S. Dollar (UUP) popped 1.06%, U.S. Aggregate Bonds (AGG) dropped 1.20% and 20+ Year Treasury Bonds (TLT) fell 2.18%. Broad Commodities (DJP) dipped 15 bps yesterday as Natural Gas (UNG) sank 1.14%, Gold (GLD) declined 95 bps, and Sugar (CANE) decreased 70 bps. WTI Crude Oil (USO) was up more than 1%.

4.10.2024

Equities: Ahead of Wednesday’s key Consumer Price Index (CPI) report, U.S. markets were mixed yesterday with The NASDAQ 100 (QQQ) and the S&P 500 (SPY) gaining 37 bps and 12 bps, respectively, and the Dow Jones Industrial Average (DIA) dipping 7 bps. QQQ and SPY are now trading within 1% of new 52-week highs. DIA is trading just below its 50-day moving average but more than 7% above its 200-day moving average. Small Caps (IJR) also rose 46 bps while Mid Caps (IJH) added 13 bps. Treasury yields eased on Tuesday with the U.S. 2-Year falling below 4.75% and the U.S. 10-Year sinking near 4.350% intraday. Alphabet climbed more than 1% ahead of the company’s Google Cloud Next Event keynote presentation. Earlier in the day, the company unveiled new custom Arm-based chips, taking a cue from Microsoft and Amazon, which have undertaken similar strategies. The CPI, which measures costs for a wide-ranging basket of goods and services, is expected to register monthly increases of 0.3% for the headline figure as well as the core figure that excludes volatile food and energy. On a yearly basis, that would put the inflation rates at 3.4% and 3.7%, respectively, a 0.2% increase for the headline rate from February and just a 0.1% decrease for the core rate. The Producer Price Index (PPI) figures will be released on Thursday.

Most U.S. factor strategies were in the green on Tuesday, led by S&P 500 High Beta (SPHB, +93 bps) and S&P 500 Dividend (SPYD, +77 bps). S&P 500 Momentum (SPMO, -42 bps) and S&P 500 Pure Growth (RPG, -39 bps) underperformed while S&P 500 Value (SPYV) added 24 bps. Developed ex- U.S. Markets (EFA) inched lower by 1 bps yesterday as Germany (EWG) sank 70 bps. South Korea (EWY) and France (EWQ) also declined around 50 bps and Hong Kong (EWH) increased 1.09%. Emerging Markets (EEM) advanced 67 bps, bolstered by solid returns from Thailand (THD, +2.49%), South Africa (EZA, +1.91%), Taiwan (EWT, +1.70%), and Brazil (EWZ, +1.45%). China (MCHI) also rose 90 bps.

Sectors: All U.S. sectors finished higher yesterday, except for Financials (XLF, -57 bps) and Industrials (XLI, -23 bps). XLF was dragged lower by Insurance (KIE, -1.67%) and XLI was impacted by Aerospace & Defense (XAR, -1.04%). Real Estate (XLRE) outpaced other sectors, jumping 1.27%. Utilities (XLU), Technology (XLK), Consumer Staples (XLP), and Consumer Discretionary (XLY) were all up around 50 bps while Health Care (XLV) increased 36 bps and Materials (XLB) rose 24 bps. XLK received a boost from Semiconductors (XSD, +2.18%) while XLV was lifted by Health Care Equipment (XHE, +1.67%) and Biotech (XBI, +1.37%). XLB hit fresh 52-week highs and is approaching overbought territory.

Themes: Solar (TAN) shined on Tuesday, advancing 4.07%. Most other global thematic segments were in positive territory for the day with Genomics (ARKG) gaining 3.30%, Advanced Materials (REMX) rising 2.94%, and Clean Energy (PBW) increasing 2.42%. Digital Infrastructure (SRVR, +1.59%) and NextGen Transportation (DRIV, +1.39%) were also strong. Cannabis (MJ) and Blockchain (BLOK) were the worst performing segments on the day, sinking 3.24% and 2.23%, respectively. Just 3 other segments saw losses yesterday: Disruptive Tech (ARKW, -38 bps), Mobile Payments (IPAY, -15 bps), and Smart Infrastructure (GRID, -4 bps).

Commodities & Yields: Broad Commodities (DJP) added 4 bps on Tuesday as Natural Gas (UNG) jumped 2.86%, Silver (SLV) gained 1.26%), and Corn (CORN) fell1.00%. WTI Crude Oil (USO) and Wheat (WEAT) each declined 1.28%. U.S. Aggregate Bonds (AGG) increased 34 bps, 20+ Year Treasury Bonds (TLT) advanced 93 bps, and the U.S. Dollar (UUP) dipped 3 bps. At yesterday’s close, the U.S. 2-Year Treasury Yield stood at 4.743% and the U.S. 10-Year Treasury Yield stood at 4.362%.

4.9.2024

Equities: Major averages were little changed on Monday following a losing week last week. The S&P 500 (SPY) and the Dow Jones Industrial Average (DIA) each rose 6 bps while the NASDAQ 100 (QQQ) added 3 bps. Small-Caps (IJR) and mid-Caps (IJH) outperformed, climbing 72 bps and 44 bps, respectively. Markets faced headwinds from treasury yields, which continued to push higher. The U.S.2-Year approached 4.80% and the U.S. 10-Year topped 4.45% intraday yesterday. Tesla jumped nearly 5% on Monday after CEO Elon Musk announced the company will reveal its robotaxi product on August 8^th. Tesla has declined more than 33% year-to-date and recently reported Q1 vehicle deliveries that were lower than the same period a year ago. Bitcoin ETFs were also up more than 6% on the day. Investors are awaiting Wednesday’s Consumer Price Index (CPI) results followed by Thursday’s Producer Price Index (PPI) results, which will provide more clarity on inflationary pressures. According to the CME FedWatch Tool, there is a 0% chance that the Fed will cut rates at the next meeting and a 51.3% chance of a rate cut at the June meeting.

S&P 500 High Beta (SPHB) led other U.S. factor strategies on Monday, climbing 1.12%. S&P 500 Dividend (SPYD) also increased 90 bps and S&P 500 Pure Value (RPV) added 22 bps while S&P 500 Momentum (SPMO) slipped 37 bps and S&P 500 Quality (SPHQ) dipped 5 bps. Emerging Markets (EEM) rose 65 bps on strength from Brazil (EWZ, +2.23%), Taiwan (EWT, +72 bps), and India (INDA, +69 bps). Developed ex-U.S. Markets (EFA, +49 bps) were boosted by Germany (EWG, +73 bps) and France (EWQ, +71 bps). Hong Kong (EWH) dipped 19 bps. 

Sectors: U.S. sectors were mixed yesterday with Consumer Discretionary (XLY, +95 bps) seeing the strongest returns. Real Estate (XLRE) gained 86 bps, Utilities (XLU) increased 66 bps, and Financials (XLF) were up 43 bps. XLF was bolstered by Regional Banks (KRE, +1.70%), Banks (KBE, +1.54%), and Capital Markets (KCE, +1.17%). After outperforming last week, Energy (XLE) slipped 63 bps, lagging other sectors. Health Care (XLV) also fell 32 bps while Industrials (XLI), Consumer Staples (XLP), and Technology (XLK) all declined around 15 bps. XLV, XLP, and XLRE are the only sectors trading below relative 50-day moving averages.

Themes: Advanced Materials (REMX), Disruptive Tech (ARKW), and Multi-Theme (ARKK) were the top performing global thematic segments on Monday, all advancing more than 2%. FinTech (FINX) and Blockchain (BLOK) all gained more than 1.65% while 3D Printing (PRNT) climbed 1.58%, Industrial Revolution (ARKQ) increased 1.55% and Genomics (ARKG) rose 1.44%. Solar (TAN, +1.41%) and Clean Energy (PBW, +1.18%) recovered from Friday’s losses. Evolving Consumer (SOCL) was the weakest returns, declining 71 bps. Casinos & Gaming (BETZ) also dropped 45 bps.  

Commodities & Yields: U.S. Aggregate Bonds (AGG) dipped 9 bps, Preferred & Income Securities (PFF) fell 19 bps, and the U.S. Dollar (UUP) slipped 14 bps yesterday. At Monday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.793% and the U.S. 10-Year Treasury Yield stood at 4.422%. Broad Commodities (DJP) added 37 bps with Agriculture (DBA) dropping 80 bps, Industrial Metals (DBB) advancing 89 bps, and Precious Metals (DBP) rising 83 bps. Natural Gas (UNG) jumped 3.63% while Silver (SLV) and Copper (CPER) were both up more than 1%.

4.8.2024

Equities: Following a stronger-than-expected Employment Situation report, U.S. markets posted gains on Friday. The NASDAQ 100 (QQQ) climbed 1.18%, the S&P 500 (SPY) rose 1.04%, and the Dow Jones Industrial Average (DIA) increased 74 bps. Despite Friday’s positive returns, all three major averages finished lower last week with DIA declining 2.24%, SPY sinking 89 bps, and QQQ falling 80 bps. The Labor Department reported on Friday that nonfarm payrolls jumped 303K in March, well above the +200K estimates and higher than the downwardly revised +270K gain in February. Wages rose 0.3% for the month and 4.1% from a year ago, both in line with estimates. The unemployment rate edged lower to 3.8%, as expected, even though the labor force participation rate moved higher to 62.7%. Treasury yields pushed higher following the strong jobs report with the U.S. 2-Year nearing 4.75% and the U.S. 10-Year increasing above 4.40% intraday. This week, investors will be looking towards the Consumer Price Index (CPI) and Producer Price Index (PPI) results along with the release of the latest Federal Open Market Committee (FOMC) meeting minutes and several speeches from Fed officials.

All U.S. factor strategies were in the green on Friday, led by S&P 500 Momentum (SPMO, +1.82%). S&P 500 Pure Growth (RPG) and S&P 500 Growth (SPYG) both advanced more than 1.50% and S&P 500 Quality (SPHQ) rose 1.16%. S&P 500 Dividend (SPYD) added just 30 bps on the day. SPMO increased 29 bps last week while all other factors saw losses. S&P 500 High Beta (SPHB) tumbled 2.26% and SPYD dropped 1.99%. Developed ex-U.S. Markets (EFA, +32 bps) were lifted by the Netherlands (EWN, +1.10%) on Friday. Hong Kong (EWH) and Australia (EWA) each gained more than 50 bps. Emerging Markets (EEM) were up 22 bps on strength from Thailand (THD, +1.60%), Mexico (EWW, +1.47%), and South Africa (EZA, +1.46%). EEM rose 41 bps last week while EFA slipped 1.11%.

Sectors: Industrials (XLI) jumped 1.39% on Friday, outpacing all other U.S. sectors, all of which were in positive territory. Technology (XLK), Energy (XLE), and Communication Services (XLC) all advanced more than 1% while Financials (XLF) increased 95 bps, Materials (XLB) gained 90 bps, and Health Care (XLV) climbed 89 bps. XLE hit new 52-week highs and was boosted by Oil & Gas Equipment & Services (XES, +1.47%). XLB was bolstered by Metals & Mining (XME, +1.42%) and XLV benefitted from strong returns from Health Care Equipment (XHE, +1.42%). Consumer Staples (XLP) was the worst performer on the day, adding just 16 bps. XLE surged nearly 4% last week. XLC also gained 1.05% while all other sectors declined. XLV sank 3.05%, Real Estate (XLRE) fell 2.91%, and Consumer Discretionary (XLY) retreated 2.75%.

Themes: Most global thematic segments saw positive returns on Friday with Cannabis (MJ, +1.90%) leading the charge. Casinos & Gaming (BETZ, +1.42%), Cloud Computing (SKYY, +1.33%), and Online Retail (IBUY, +1.28%) were all strong. Evolving Consumer (SOCL), Cyber Security (HACK), and Biotech (SBIO) were all up more than 1% while Big Data (AIQ) and eSports & Video Games (ESPO) both gained more than 80 bps. Solar (TAN) and Clean Energy (PBW) underperformed, slipping 1.35% and 99 bps, respectively. Blockchain (BLOK) and Advanced Materials (REMX) each fell more than 60 bps. Genomics (ARKG) and BLOK each plunged around 7% last week while Multi-Theme (ARKK) and Space (UFO) each declined nearly 6%. MJ was the best performing segment for the week, climbing 2.63%.

Commodities & Yields: The U.S. Dollar (UUP) added 11 bps, U.S. Aggregate Bonds (AGG) slipped 49 bps, and 20+ Year Treasury Bonds (TLT) dropped 1.39% on Friday. At the closing bell, the U.S. 2-Year Treasury Yield stood at 4.732% and the U.S. 10-Year Treasury Yield stood at 4.378%. Broad Commodities (DJP) gained 70 bps as Gold (GLD) climbed 1.71%, Silver (SLV) jumped 2.20%, Copper (CPER) increased 1.07%, and Agriculture (DBA) advanced 1.13%. SLV is up 15.51% over the past month.

4.5.2024

Equities: Ahead of Friday’s Employment Situation report, major averages were down sharply on Thursday.  The NASDAQ 100 (QQQ) declined 1.53%, the Dow Jones Industrial Average (DIA) slipped 1.34%, and the S&P 500 (SPY) fell 1.22%. Markets were shaken by more cautious rhetoric from Federal Reserve officials. Yesterday, Minneapolis Federal Reserve President Neel Kashkari expressed caution that interest rate cuts might not happen this year unless there’s more progress on inflation. Richmond Federal Reserve President Thomas Barkin also noted Thursday that inflation data this year has been “a little less encouraging” but a strong labor market and macro economy allow Fed officials “time for the clouds to clear” before cutting rates. After rising above 4.40% intraday Wednesday, the U.S 10-Year was trading around 4.35% yesterday. The Labor Department Reported that jobless claims totaled 221K for the week ended March 30, up 9K from the previous week and higher than the 213K estimate. That was the highest total since January 27. In other economic news, the Commerce Department reported that the trade deficit rose to $68.9 billion in February, up $1.3 billion on the month and higher than the $67.7 billion estimate. That was the highest imbalance on the goods and services measure going back to April 2023.

All U.S. factor strategies dropped at least 50 bps yesterday with most falling more than 85 bps. S&P 500 Pure Growth (RPG) sank 2.08%, S&P 500 Growth (SPYG) and S&P 500 High Beta (SPHB) each declined 1.52%, and S&P 500 Quality (SPHQ) retreated 1.43%. S&P 500 Pure Value (RPV) and S&P 500 Momentum (SPMO) both decreased 1.34%. Emerging Markets (EEM) dipped 36 bps on weakness from Thailand (THD, -1.03%) and Taiwan (EWT, -40 bps). China (MCHI) slid 40 bps. Developed ex-U.S. Markets (EFA) slipped 86 bps as France (EWQ), the Netherlands (EWN), and Japan (EWJ) were all down more than 1%. 

Sectors: All U.S. sectors finished in negative territory on Thursday with Technology (XLK, -1.58%) falling the furthest. Health Care (XLV) also sank 1.44%, dragged lower by Biotech (XBI, -1.70%), and Communication Services (XLC) fell 1.35%. Consumer Discretionary (XLY), Financials (XLF), and Materials (XLB) all slid more than 1% followed by Industrials (XLI, -88 bps) and Real Estate (XLRE). Energy (XLE) inched lower by just 6 bps and remains in overbought territory. Oil & Gas Exploration & Production (XOP) was the only industry to see gains yesterday, adding just 3 bps. All sectors are trading above relative 200-day moving averages.

Themes: Volatility continued for Cannabis (MJ) as it plummeted 7.88% on Thursday following a 9.59% gain on Wednesday. All other global thematic segments were in the red with most dropping more than 1%. Biotech (SBIO) declined 2.17%, Mobile Payments (IPAY) fell 1.94%, and Online Retail (IBUY) retreated 1.83%. Blockchain (BLOK) and Connectivity (FIVG) both slipped more than 1.70% while FinTech (FINX), Genomics (ARKG), and Advanced Materials (REMX) all sank around 1.60%. ARKG is approaching oversold territory and is trading more than 10% below its 50-day and 200-day moving averages.

Commodities & Yields: At yesterday’s closing bell, the U.S. 2-Year Treasury Yield stood at 4.641% and the U.S. 10-Year Treasury Yield stood at 4.309%. The U.S. Dollar (UUP) was flat, U.S. Aggregate Bonds (AGG) rose 24 bps, and 20+ Year Treasury Bonds (TLT) increased 72 bps on Thursday. Broad Commodities (DJP) inched higher by 3 bps as WTI Crude Oil (USO) gained 1.26%, Natural Gas (UNG) slumped 3.92%, Silver (SLV) dropped 97 bps, and Industrial Metals (DBB) advanced 48 bps.