Edition 0010. 04.02.2022. Week of 03.28 - 04.03.2022.
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. We then we zoom in to discover where the real strength resides. To increase the utility of this research, we use ETFs as much as possible.
Asset Classes
Performance Table.
Sorted by one week performance, this table looks at the broadest 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 it was real estate, both domestically and abroad, that were the strongest asset classes. As a whole, we saw gains globally in equites and bonds a like. The commodity indices and the US dollar finished last week lower.
Asset Class Year-to-Date Chart.
Click to enlarge.
From a year-to-date perspective the picture remains clear. Commodities are positive this year. Modest gains in the US dollar, and negative returns for the equities, fixed income, and real estate markets. We do see equities and real estate gaining some ground the last few weeks over bonds.
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 on the value, growth, and core style factors across the US equity cap-scale.
Click here for the performance table guide. Click the performance table to enlarge.
Last week we saw gains, though modest, in the growth ETFs across the cap-scale and from small core style ETFs. None of the ETFs that were up last week are up this year-to-date or have a positive trend or momentum condition according to our quantitative measures. It is interesting that all of our 6 pure style ETFs were negative, even growth. I cannot really determine what this means. Why would growth ETFs finish positively with pure growth ETFs finishing down? Perhaps this tells the story of confusion or indecision.
US Equity Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date story here remains similar. Pure value leads while pure growth lags
***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.
Last week it was the low volatility components of the S&P 500 that were purchased. SPY itself was essentially flat. All of the other style ETFs finished down led lower by pure value.
S&P 500 Factor Performance Year-to-Date Chart.
Click to enlarge.
YTD the picture looks stable. RPV, pure value, continues its leadership with SPYD, high dividend. PRG, pure growth, continues to lag the pack.
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.
Energy continues to lead across the cap scale. In the large-cap space we saw new all-time closing highs in insurance, utilities, and food/staples retail. In the mid-cap space, we saw new all-time and 52-week closing highs from food and staples retail, insurance, and utilities. Notably, banks recorded a 13-week closing low. In the small-cap space, utilities closed at an all-time closing high. An interesting theme in the small and mid-cap space was the 52-week closing lows for consumer durables & apparel and retail. We see this playing out in the risk ratio of discretionary versus staples. Coupled with the negative reading in monthly consumer sentiment from the University of Michigan consumer sentiment survey, perhaps there is a theme here.
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 saw the commodity complex close lower with base metals being the exception. This group of 10 ETFs are just 2 weeks, on average, and 7.15% off of their 52-week closing highs. Our quantitative measures show all of these ETFs are still trending positively with positive momentum conditions.
Commodities Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date story remains unchanged. We do see DBB, base metals, overtaking SPGSNE, a broad group of commodities ex-energy.
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.
Last week 30%, or 19 of the 63, symbols we follow closed higher. 4 and 13-week closing lows expanded, as did 52-week and all-time closing highs.
Energy – Energy was the weak spot. US natural gas was the outlier, likely on the news that increased US natural gas is being shipped to Europe. US natural gas closed at a 52-week closing high.
Metals – Base metals were last week’s top performing part of the commodities market. The space was led by zinc, lead, and lithium. Precious metals had a touch week despite all of the optimism surrounding the space. Gold, platinum, palladium and silver all finished lower.
Agriculture – Grains had negative week except for muted gains in corn and oats. Softs were mixed with gains in OJ, coffee, and cocoa. Those gains were offset by the losses in cotton, sugar, and lumber.
Livestock – Livestock was mixed with gains in feed cattle being dragged down by live cattle and lean hogs.
Commodity related ETFs – Mixed. We saw gains in oil refiners, gold, silver, and copper miners. Water related companies up, while shipping companies were down.
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, and 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.
Except for 1 to 7 year us treasury bonds, TIPS, and MUNI bonds, the complex closed last week with some gains! Emerging market bonds led the gains, joined by domestic corporate bonds, and long dated US Treasury bonds.
Bond Performance Year-to-Date Chart.
Click to enlarge.
YTD there are no bond ETFs above 0. The picture remains stable.
Checking in on the Yield Curve. Click to enlarge.
The yield curve is certainly humped, but not inverted. It is important to note that not all flat or humped curves turn into fully inverted curves, however we should not discount a flat or humped curve.
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.
Last week was a great week of equities around the globe. The gains were led by emerging markets, followed by developed, and then frontier markets. The majority of these ETFs closed at 4-week closing highs.
International Equities Year-to-Date Performance Chart.
Click to enlarge.
The YTD picture is similar to last week. While none of our markets, as whole, are positive this year-to-date, emerging markets ex-China is leading, followed by the US, and then frontier markets. As a whole, Developed markets ex-us and emerging markets continue to lag.
International Equities Performance Table - Detailed.
Here is the detailed table with many international ETFs, sorted by one week performance.
Click here for the performance table guide. Click the performance table to enlarge.
Last week was a strong one for emerging markets. Greece, Turkey, and Hungary led while Taiwan, Chile, and Qatar lagged. Frontier markets were strong led by Argentina. Developed markets were strong as well. They were led higher by Denmark, Italy, and Finland while the year-to-date leaders in Canada and Norway closed lower.
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 the frontier market space, Argentina continued its leadership and closed at a new 13-week closing high. In the emerging markets space, Brazil continued to lead and closed at a 13-week closing high. Latin America remains strong with continued leadership from Chile, Peru, and a new 52-week closing high in Colombia. In the Developed markets space, Australia continued to lead, and though down last week, Norway and Canada remain in the top 3 positions.
Conclusion
From the broadest perspective, we saw commodities lag last week while real estate led domestically and abroad. Equity markets and bonds rallied globally on US Dollar weakness.
Comments