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View From The Top. Week 15.

Edition 0012. 04.15.2022. Week of 04.11 - 04.17.2022.


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.

 

Key Takeaways

  • From the broadest perspective, we saw commodities lead last week. We know those gains came largely from energy and livestock as the US Dollar closed at a 52-week high.

  • Domestic and international real-estate, equites, and bonds finished the week with losses.

  • In US equites, investors bought small and mid-cap value names, as well as large-caps with dividends.

  • International equities were down as a whole, except for frontier markets. Zooming in, Latin America took a break while emerging markets, led by Turkey and Hungary, outperformed developed markets, led by Ireland and Austria.

  • Bonds sold of both domestically and abroad, except for US short-term corporate issues. US Treasuries were hit hard, except of shorter-term TIPS and treasuries, especially out on the long end of the curve.

Asset Classes

Performance Table.

Sorted by one week performance, this table looks at the broadest groups of domestic and international equites, real-estate, commodities, bonds, and the US dollar.


Click here for the performance table guide. Click the performance table to enlarge.

Last week asset class prices told us a familiar story. Commodities and the US Dollar finished at 52-week highs, while domestic and international equites, real estate, and bonds finished lower.


Asset Class Year-to-Date Chart.

Click to enlarge.

From a year-to-date perspective, the picture remains unchanged. Commodities have positive returns this year and remain strong. The US Dollar continues to push slowly upwards. Real estate, bonds, and equities remain negative, with US Treasury Bonds positioned as the worst performer of the asset classes.


US Equities

***For a detailed commentary and charts, 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 the performance table for the US equity factors growth, value, and core finished mixed. From a pure perspective, small and mid-cap pure value was favored, though both growth and value were purchased. Large-cap pure growth closed lower and recorded a 4-week closing low.


In the traditional factor space, the group was also led by small and mid-cap value, though small and mid-cap core was purchased as well. Large and mega-caps were sold, as was small-cap growth. Several 4-week closing lows in those names.


US Equity Factor Performance Year-to-Date Chart.

Click to enlarge.

The year-to-date story remained unchanged last week. Large-cap pure value (RPV) continues to lead with mega-cap value (MGV) now in second position, tentatively. Small-cap pure value (RZV) is attempting to remain in positive territory. Small-cap growth (IWO), large-cap pure growth (RPG), and small-cap pure growth (RZG) continue to be the weakest factors in this group.


S&P 500 Factor Performance Table.

 

***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 in the large-cap space it was pure-value (RPV) and high dividend (SPYD) names that were purchased. The high-divided factor recorded an all-time closing high. SPY itself and pure-growth (RPG) were the weakest in the group, and notably the momentum factor (SPMO) was very weak as well. These weak names all recorded 4-week closing lows.


S&P 500 Factor Performance Year-to-Date Chart.

Click to enlarge.

The year-to-date picture looks stable. Pure value (RPV) and high dividend (SPYD) continue their leadership. SPLV, low-volatility, fell back into negative territory. RPG, pure growth, remains the weakest of the large-cap factors.


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 a 52-week closing high in energy, and all-time closing high in the food, beverage, and tobacco, group, and we saw a 13-week closing highs in the telecom group. In the mid-cap space, we saw 52-week closing high in energy. Mid-cap materials also had a strong week. In the small-cap space, energy and food/staples retail closed at 52-week highs. Telecom and the food, beverage, and tobacco groups also finished with 13-week closing highs.


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 the leader in commodities was energy. We had 52-week closing highs from energy and agriculture. Precious metals gained some ground and closed at a 4-week high. Just 6 weeks from its last 52-week closing high, the base metals ETF was the weakest part of the commodity space though it did gain 19 basis points (0.19%) last week.


Commodities Performance Year-to-Date Chart.

Click to enlarge.

The year-to-date story remains largely unchanged. Energy continues to lead followed by agriculture, base metals, livestock, and then precious metals.


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 46% of, or 29 of 63, symbols we follow closed higher. It was the energy space that saw the greatest gains.


Energy – In the energy complex, everything we track finished higher. The gains were led by heating oil, natural gas, and then domestic oil.


Metals – Metals were mixed. Precious out performed base with silver leading. Gold and platinum were up as well. Base metals saw the largest gains from zinc and steel. Lithium continues to fall and remain down 14.5% this year-to-date.


Agriculture – Softs finished mixed led by OJ again, while lumber continues to sink and is down 22.5% this year-to-date. Grains were also mixed led by palm and soybean oil while oats was weak.


Livestock – The entire livestock space was positive last week. Live cattle led the space.


Commodity related ETFs – These names mostly closed higher. Junior gold miners, silver miners, gold miners, agricultural related businesses, natural gas related businesses, and copper miners closed higher. I keep seeing this pattern where copper miners close higher while copper itself closes lower. Shipping was mixed. Water related companies closed lower.


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.

Another ugly week for bonds. 84% or 26 of our 31 ETFs have recorded new closing lows. There was a touch of buying in the short-term corporate, US Treasury, and TIP space. The majority of the US Treasury space sold off with the most pain being felt along the long end of the curve. Munis were all down. The international space was all down and led lower by emerging markets debt.


Bond Performance Year-to-Date Chart.

Click to enlarge.

YTD there are no bond ETFs above 0. The picture remains stable. The best of the worst includes the cash equivalents BIL and MINT, with short term tips taking over 2nd position. The laggards of the group remain long duration US treasuries, TLH and TLT, and emerging sovereign debt PCY.


Checking in on the Yield Curve. Click to enlarge.

The yield curve has become less humped and more normal. Rates are obviously higher than the beginning of this year. The flattening from the middle to the long end indicates that perhaps the bonds market is most concerned with economic risks 1 to - 7 years from now.



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 another rough week for equities around the globe. Frontier markets finished with a gain and notched a 4-week closing high for the second week in a row. Small gains from US small-caps. Emerging markets and developed markets ex-us down last week.


International Equities Year-to-Date Performance Chart.

Click to enlarge.

The YTD picture remains largely unchanged. None of our markets, as whole, are positive this year-to-date, however frontier markets are gaining strength. As a whole, developed markets ex-us, emerging markets, and US small-caps 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 the frontier market space was the strongest, and of the ETFs we have, the strength was led by Pakistan. Developed markets saw muted gains in the Ireland, Austria, and France ETFs. These ETFs have been losers this year-to-date. Emerging markets saw strength in Chinese energy, Turkey, and Hungary. Chinese energy closed at 52-week highs, and Turkey closed at 13-week highs. Aside from Hungary, these have been strong year-to-date performers. The standalone markets saw gains from Saudi Arabia which closed at an all-time high. Of our miscellaneous ETFs, Latin America took a break last week. Africa had a small gain while developed markets ex-US lagged.


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, it is Argentina leading the way this year-to-date. In emerging markets, it is Brazil, Chinese energy, Turkey, Columbia, Chile, and Qatar leading the way this year-to-date. In the developed market space, it is Norway, Australia, and Canada moving higher this year-to-date.

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