Edition 0015. 05.014.2022. Week of 05.09 - 05.15.2022.
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, asset classes were mixed last week. Bonds, both domestic and international, finished with a gain. This was the first time in 5 weeks.
The US Dollar index remains strong and printed a fresh 52-week closing high.
In US equities, last week the selling with indiscriminate. Value, growth, and core ETFs lost in value.
In the large cap space, the selling pressure was greater than the buying pressure across all styles. The only styles still in positive territory YTD are RPV (S&P 500 pure value ETF), and SPYD (the high dividend ETF).
From an industry group perspective, only 12 of 72, 16% of, groups closed with a gain last week. New lows continue to far outnumber new highs. From a quantitative perspective, the large-cap food, beverage & tobacco industry group is the only 1 of the 72 groups in an uptrend with a positive momentum condition.
Last week, commodities were led by agriculture and dragged by metals which have given back all of their year-to-date gains. Gasoline printed an all-time closing high, as did cotton, and rough rice.
Treasuries, both domestically and globally caught a bid. There was even some interest in investment grade corporate bonds.
Last week was another rough week for global equity markets. The losses were led frontier markets and US small-caps. The best of the worst was developed markets ex-us.
The year-to-date picture looks the best for Emerging markets and commodity exporting and producing nations.
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.
Asset classes were mixed last week. Bonds, both domestic and international, finished with a gain. This was the first time in 5 weeks. Bonds are, on average, 1% above their 52-week lows. The US Dollar index had another strong week and closed at 52-week highs. Domestic and international real estate, equities, and commodities all finished lower. Domestic and global equities and real estate both closed at 52-week lows. US real estate was the biggest laggard.
Asset Class Year-to-Date Chart.
Click to enlarge.
Year-to-date, commodities and the US Dollar Index continue in positive territory. Domestic and international bonds (BNDX, GOVT, AGG) are the best of the worst. Domestic and international real estate and equities are the laggards (VNQI, SPTM, VNQ, ACWX, IWV).
The US Dollar Index. Click to enlarge.
The US Dollar index pressed higher above the $100 psychological level. I am watching $106/$106.50 next. That is the 38.2% retracement from the 1985 highs to the 2008 lows.
The Invesco Commodity Index ETF, DBC. Click to enlarge.
he DBC commodities ETF is holding its 2022 trendline and despite the recent sideways price action, the trend is still up. I am watching for a close above $28.50 to signal the start of the next leg higher.
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 was ugly for US equity factor ETFs. The entire complex closed lower with the smallest loss being 1.29%. Aside from the S&P 500 pure value ETF (RPV) and the S&P 400 pure value ETF (RFV), 20 of 22 ETFs printed either 13 or 52-week closing lows. The only ETF with a YTD gain is RPV, and the momentum is slowing. See RPV's chart below.
US Equity Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date story remains unpleasant. RPV, the S&P 500 pure value ETF is the only ETF that remains positive. To note, it did peak the week of 03/25 and has since been declining. It did find support this week at its upward sloping trendline.
The Invesco S&P 500 Pure Value ETF, RPV. Click to enlarge.
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.
In the large cap space, last week the selling pressure was greater than the buying pressure across all styles. Aside from the pure value (RPV – chart above) and high dividend (SPYD – chart below) ETFs, the other 6 ETFs printed 13 or 52-week closing lows.
S&P 500 Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date picture remains unchanged. SPYD, the high dividend ETF, and RPV, the S&P 500 pure value ETF, are both positive this YTD. The laggard remains the pure growth ETF RPG.
The Invesco S&P 500 High Dividend ETF, SPYD. Click to enlarge.
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.
From an industry group perspective, only 12 of 72, 16% of, groups closed with a gain last week. New lows continue to far outnumber new highs. From a quantitative perspective, the large-cap food, beverage & tobacco industry group is the only 1 of the 72 groups in an uptrend with a positive momentum condition.
On average, the industry groups were negative across the cap scale. Small-caps were down the least, with mid-caps in the middle, and the losses were led by large-caps.
In the large-cap space it is energy with a large 44%+ ytd gain. Also positive is the food beverage & tobacco index. Last week we saw a gain in the food beverage & tobacco index which closed at an all-time high.
In the small-cap space it is energy with a 36% ytd gain. Also positive is food & staples retail. Those have been pulling back though. Last week the gains were led by the food beverage & tobacco index, followed by media & entertainment. The automobiles & components index had a very large bounce printing a 5-week closing high.
In the mid-cap space it is only energy with a YTD gain at 28%. Last week we did get a bounce in the food beverage & tobacco index, as well as the food & staples retailing index and the household & personal products index.
For a refresher on the MSCI GICS Classification Standards, visit this website.
Commodities.
Performance Table.
Click here for the performance table guide. Click the performance table to enlarge.
Last week, the commodity space was carried by agriculture. The TAGS ETF, which contains softs and grains, printed a 52-week closing high. The DBA ETF did not print a fresh closing high because it additionally contains livestock, and livestock down last week. Both base and precious metals printed 13-week closing lows. Livestock printed a 5-week closing low.
Commodities Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date story for commodities is largely that of energy and agriculture. Both base and precious metals have fallen to the bottom of the pack and are now showing year-to-date losses.
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 – In the energy complex, gasoline and WTIC closed higher. Gasoline printed an all-time closing high. The laggard was natural gas.
Metals – Both base and precious metals closed, on average, lower with most ETFs printing fresh 13-week closing lows. Copper however printed a 52-week closing low. Lithium and aluminum bounced higher.
Agriculture – In softs, cotton, coffee, and sugar closed higher. Cotton printed an all-time closing high. In grains, it was wheat led, followed by soybean oil, rapeseed, and rough rice. Wheat printed a 52-week closing high and rough rice an all-time closing high.
Livestock – Everything here was down. The losses were led by lean hogs.
Commodity related ETFs – These ETFs were mostly lower. Global shipping companies printed a 5-week closing high.
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.
The Invesco Agriculture ETF, DBA. Click to enlarge.
The Teucrium Wheat Fund ETF, WEAT. Click to enlarge.
The iPath Series B Bloomberg Cotton Total Return ETN, BAL. Click to enlarge.
The United States Copper Fund ETF, CPER. Click to enlarge.
Fixed Income
Bonds Performance Table.
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.
Bonds bounced! US Treasuries led the bounce, especially the long end of the curve. Investment grade US corporate bonds saw a bounce, as did international bonds. There was no interest, domestically or internationally, for high-yield corporate or municipal bonds.
Bond Performance Year-to-Date Chart.
Click to enlarge.
In the YTD picture, we now have BIL, the 1-3 month t-bill, in positive territory! The laggards of the group remain long duration US treasuries, TLH and TLT, and emerging markets in the form of EMB and PCY.
Checking in on the Yield Curve.
Click to enlarge.
Current yields are available here: https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2022
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. 100%, so 12 of 12 ETFs closed lower and printed 52-week closing lows. The losses were led by frontier markets and US small-caps. The best of the worst was developed markets ex-us.
International Equities Year-to-Date Performance Chart.
Click to enlarge.
The YTD picture remains ugly. None of our markets, as whole, are positive this year-to-date, however emerging markets ex-China and developed markets ex-US are at the top of the pack. US small-caps are the worst of the worst this YTD.
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.
When we zoom in, last week we saw bounces in some emerging markets such as Brazil, Chile, Mexico, China, Egypt, and South Africa.
In developed markets we saw bounces from Sweden, Germany, and Hong Kong.
Here is the same table sorted by year-to-date change.
Click here for the performance table guide. Click the performance table to enlarge.
The year-to-date picture looks the best for Emerging markets. This is led by Saudi Arabia, Chinese energy, and commodity producing and exporting nations such as Qatar, Turkey, Brazil, Colombia , and UAE.
Developed markets do not have any names that are positive this YTD. In the standalone and frontier space, Nigeria is holding its own. Below is a chart of Saudi Arabia which is the only ETF on our list that is positive in trend with a positive momentum condition, quantitatively.
The iShares MSCI Saudi Arabia ETF, KSA. Click to enlarge.
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