Edition 0008. 03.19.2022. Week of 03.14 - 03.20.2022.
This weekly commentary starts "from the top." We will assess the performance of international and domestic equites, fixed income, and commodity markets. We start with the broadest ETFs and indices to consider the big picture, and then we zoom in to discover where the real strength resides. To increase the utility of this research, I use ETFs as much as possible. Clicking the tables and charts will enlarge them.
Asset Classes
Performance Table.
Sorted by one week performance, this table looks at the broad groups of domestic and international equites, domestic and international real-estate, commodities, domestic bonds, and the US dollar.
Click here for the performance table guide. Click the performance table to enlarge.
Last week global markets were strong and outperformed US markets. US markets did see strong 6% gains and recorded 4-week closing highs. Global and domestic real estate finished with gains last week as well. Global and domestic bonds sold off and recorded 52-week closing lows. The US dollar finished lower, and in a surprising turn of events, commodities finished last week lower.
Asset Class Year-to-Date Chart. Click to enlarge.
YTD, the picture remains the same. Commodities and the USD remain positive while real estate, bonds, and equities remain negative both domestically and globally. Real estate ex-us did take over as the strongest of the laggards while bonds, both domestic and global, continued their sell-offs.
US Equities
***For a detailed commentary and on the US equity landscape, click here to read the weekly edition of The US Equity Landscape.***
US Equity Factor Performance Table.
This table, sorted by one week performance, takes a broad view across the value, growth, and core factors across the US equity cap-scale.
Click here for the performance table guide. Click the performance table to enlarge.
In a change of character for the US growth, value, and core factor ETFs, it was growth, across the cap-scale, that enjoyed large rallies last week. All 3 factors finished with gains. Value lagged. Every ETF on this list closed at 4-week highs. Notably, none of the ETFs are in quantitative uptrends with positive momentum, not even out YTD leader, PRV.
US Equity Factor Performance Year-to-Date Chart. Click to enlarge.
With the massive bounce last week in the ETFs, we notice that RZV (S&P 600 pure value), RFV(S&P 400 pure value), and MGV(mega-cap value) joined RPV (S&P 500 pure value) in positive YTD territory.
***For a detailed commentary on 11 S&P 500 sectors, read the weekly edition of The Sector Inspector here.***
S&P 500 Factor Performance Table.
This table, sorted by one week performance, takes a look at several S&P 500 factor ETFs.
Click here for the performance table guide. Click the performance table to enlarge.
The S&P 500 had a large bounce. Pure growth bounced the most while the high divided stocks bounced the lease. None of these ETFs are in a quantitative uptrend with positive momentum despite 6 of 8 of these ETFs recording 4-week closing highs.
S&P 500 Factor Performance Year-to-Date Chart. Click to enlarge.
The picture here remains the same, both SPYD (S&P 500 dividend stocks) and RPV (S&P 500 pure value) remain above 0.
US Sector Industry Groups (GICS Level II) Performance Table.
This table, sorted by year-to-date performance, shows us the 24 industry groups across the S&P cap-scale.
Click here for the performance table guide. Click the performance table to enlarge.
While last week was green for the most part, energy was down across the cap scale. So were small cap utilities and mid-cap telecom services. The YTD picture remains largely the same with energy, materials, food/staples, and some parts of financials, such as insurance names, earning positive returns this YTD. We find all-time highs in mid-cap materials and food/staples names as well as in large cap insurance and food/staples names.
For a refresher on the MSCI GICS Classification Standards, visit this website.
Commodities.
Performance Table.
This table, sorted by one week performance, takes a very broad perspective on the commodities landscape of energy, metals (industrial and precious), agriculture (grains and softs), and livestock.
Click here for the performance table guide. Click the performance table to enlarge.
Last week commodities finished down. Livestock did close in the green. Quantitative trend and momentum conditions are still intact.
Commodities Performance Year-to-Date Chart. Click to enlarge.
Last week was the 2nd consecutive down week for most commodities. Energy (DBE) still leads with agriculture in second (SPGSAG), and base metals in third (DBB). Live stock (SPGSLV) strengthen as precious metals (DBP) continue to lag.
Commodities Performance Table - Detailed.
This table, sorted by one week performance, zooms in on the commodity space.
Click here for the performance table guide. Click the performance table to enlarge.
Energy – Energy was mixed. Heating oil and natural gas were up. WTI and Brent crude oil were both down. Gasoline was down
Metals – Precious metals all finished the week lower, while base metals were mixed. Lithium was up, as well as steel, copper, and zinc. Nickel lagged.
Agriculture. – Softs were mixed. Gains in OJ and cotton. Cotton finished at an all-time closing high while coffee finished at a 13-week closing low. Big decline in lumber. Grains were mixed as well. The largest gains were in oats and the largest losses were in soybean oil. Palm oil recorded an all-time closing high.
Livestock – Livestock had live and feeder cattle up with lean hogs down.
Commodity related ETFs – This group was mixed. Lots of strength in water, forestry, shipping, and agricultural businesses, as well copper miners. Silver and gold miners lagged. Unconventional gas closed at a 52-week high. Agriculture business closed at all-time highs.
Here is the commodities table sorted by the year-to-date change.
Click here for the performance table guide. Click the performance table to enlarge.
Fixed Income
Bonds Performance Table.
The charismatic CMT and founder of All-Star Charts, J.C. Parets, is known for saying, “I trust two things in this world, dogs and the bond market.” This table, sorted by one week performance, is grouped by international bonds, corporate bonds, municipal bonds, US government bonds, and broad bond ETFs.
Click here for the performance table guide. Click the performance table to enlarge.
While the broad ETFs were all down, below the surface bonds were mixed last week. In the US, government bonds all sold off. Corporate bonds were largely bought, save short term investment grade bonds. Muni bonds sold off. In the international space, emerging markets were up while developed markets were down.
Bond Performance Year-to-Date Chart. Click to enlarge.
YTD we see short duration TIPS still above 0.
Checking in on the Yield Curve. Click to enlarge.
International Equities
International Equities Performance Table.
This is another very high-level performance table sorted by one week performance. Please think of the ETFs this way:
ACWI = developed and emerging markets. (including the US).
ACWX = developed and emerging markets. (excluding the US).
URTH = developed markets. (including the US).
EFA = developed markets. (excluding the US).
SCZ = developed markets small-caps. (excluding the US and Canada).
EEM = emerging markets.
EMXC = emerging markets. (excluding China).
EWX = Emerging markets small-caps.
FM = frontier markets.
SPTM = US market (small, mid, & large cap).
SPY = US market (large cap).
For a refresher on the how MSCI organizes the global markets, visit this website:
Click here for the performance table guide. Click the performance table to enlarge.
Great week for equities around the globe. Developed markets led, followed by emerging markets, US markets, and then frontier markets. US markets closed at 4-week highs. This surely helped push ACWI and URTH to their new 4-week closing highs.
International Equities Year-to-Date Performance Chart. Click to enlarge.
The YTD chart shows a global decline since the second week of January. Last week’s bounce placed emerging markets ex-china ahead of frontier markets this YTD.
International Equities Performance Table - Detailed.
Here is a table with many international ETFs, sorted by one week performance.
Click here for the performance table guide. Click the performance table to enlarge.
Zooming in, we see the breadth of the equities bounce. Developed markets were led by the Netherlands. Emerging markets were let by China. Frontier markets were led by Argentina. Russia remains halted, though might open next week.
Here is the same table sorted by year-to-date change.
Click here for the performance table guide. Click the performance table to enlarge.
In frontier markets, Argentina continues its YTD strength. Emerging markets continues to see strength from Latin America and South Africa. Developed markets are certainly weaker than emerging markets this YTD. Developed markets were led by Norway, Canada, and Australia. These are largely commodity driven economies.
Conclusion
Last week the dollar and commodities were down. We did see strength is natural gas, heating oil, and lithium. Equities markets had a strong bounce globally. Bonds had a mixed week with US bonds selling off, save corporate bonds, as international bonds were bought.
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