Edition 0016. 05.21.2022. Week of 05.16 - 05.22.2022.
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 finished mixed last week. International stocks, international real estate, and US bonds closed higher.
GSG, the commodity ETF that includes livestock unlike DBC, closed at a 52-week high. US Bonds closed at a 5-week high. US real estate and equities closed at 52-week lows.
For US equity factor ETFs, last week the selling was indiscriminate. The entire complex closed lower. All 22 ETFs printed 52-week closing lows. There are no longer any ETFs with a positive performance this year-to-date.
In the large cap space, last week the selling pressure was pervasive. All 8 of the ETFs printed either 13 or 52-week closing lows. SPYD, the high dividend ETF, remains positive this year-to-date.
From an industry group perspective, energy remains the YTD leader across the cap scale.
Commodities were led by metals, livestock, and agriculture. Energy was lower on average, but natural gas was up and closed at a 52-week high.
Bonds bounced for a second week in row. We saw more new highs than lows, and this is logical as the charts are bouncing, at least temporarily from their 2018 support levels.
For now, inflation expectation using TIP/IEF has turned down as had the 5-year forward inflation expectations. See charts below.
When zoom in to global markets, last week we saw the most strength in emerging Americas markets. This year to date there are not many markets to love, though still strong is Chile and Qatar. Saudi Arabia is pulling back harder.
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 finished mixed last week. International stocks, international real estate, and US bonds closed with gains. Commodities were mixed. International bonds, domestics equities, domestic real estate, and the US Dollar Index closed with losses. GSG, the commodity ETF that includes livestock unlike DBC, closed at a 52-week high. US Bonds closed at a 5-week high. US real estate and equities closed at 52-week lows.
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 pulled closed lower last week after 6 weeks of gains. I am watching $106/$106.50 above and $100 below.
The Invesco Commodity Index ETF, DBC. Click to enlarge.
DBC, a commodities ETF, is holding its 2022 trendline. 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.
iShares US Treasury Bond ETF, GOVT. Click to enlarge.
US Treasury Bonds have closed back above their 2018 lows.
SPDR Total Stock Market S&P1500 ETF, SPTM. Click to enlarge.
The S&P 1500 closed last week lower for 7th consecutive week. I am watching the confluence of support around the $46.50 level which marks its 38.2% retracement level and the anchored volume weighted average price from its 2020 Covid low.
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 another ugly for US equity factor ETFs. The entire complex closed lower. All 22 ETFs printed 52-week closing lows. There are no longer any ETFs with a positive performance this year-to-date.
US Equity Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date story has changed for the worse. RPV, the S&P 500 pure value ETF has given back all of its YTD gains. There are now no factor ETFs in positive territory this YTD. MGK, mega-cap growth, has now surpassed IWO (Russell 2000 growth) and RZG (S&P 600 pure growth) to the downside.
The Invesco S&P 500 Pure Value ETF, RPV. Click to enlarge.
RPV has given back all of its year-to-date gains. It has however found support at its upward sloping trendline which has been in play since July of 2021.
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 pervasive. All 8 of the ETFs printed either 13 or 52-week closing lows. SPYD, the high dividend ETF, remains positive this year-to-date.
S&P 500 Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date performance is deteriorating. SPYD, the high dividend ETF is rapidly giving back its YTD gains, which is something RPV, the S&P 500 pure value ETF, has just done. The laggard remains the pure growth ETF RPG.
The Invesco S&P 500 High Dividend ETF, SPYD. Click to enlarge.
The S&P 500 high dividend ETF is holding up well compared to the S&P 500 itself. Price remains above its upward sloping trendline, and, unlike RPV, momentum remains above its upward sloping trendline just barley. An anchored volume weighted average price from December 31st 2021 shows us that, on average, anybody who purchased this ETF in 2022 is now showing a loss.
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, new lows continue to dominate. The quantitative model shows mid-cap utilities as 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. Large-caps were down the least, followed by mid-caps, and the losses were led by small-caps.
In the large-cap space it is energy with a large 44%+ ytd gain. Also positive is the food beverage & tobacco index and the telecom services group.
In the mid-cap space it is energy with a YTD gain an almost 31% ytd gain. Utilities if fighting for to hold its very small gain.
In the small-cap space, only energy is positive this year-to-date with a 41% gain.
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 in the broad commodities space, metals finished with the largest weekly gains. Base metals outperformed precious. Livestock and agriculture also closed last week with gains. Energy finished with a loss.
Commodities Performance Year-to-Date Chart. Click to enlarge.
The year-to-date story for commodities is largely that of energy and agriculture. Base metals have closed back above 0 for a positive YTD performance. Base metals remains below 0 with a YTD loss.
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, natural gas led the way and closed at a 52-week high. WTI crude also closed with gains and closed at a 5-week high. USO closed with gains which is the front month WTI contracts while USL lost value which is the 12-month WTI contracts. This potentially speaks to WTI dropping in price over the coming months.
Metals – Both base and precous metals closedhigher. Base metals led precious with large gains in Zine, lithium, and nickel. Copper was up as well. Precious metals all closed higher. They were led by silver.
Agriculture – In softs, sugar led the gains and closed at a 5-week high. Orange juice also had a strong week. In grains, soybean meal and soybean futuers were the big winners.
Livestock – Kivestock was mixed with lean hogs up more than 8%, while live and feeder cattle finished lower.
Commodity related ETFs – These ETFs were, on average, higher. Dry-bulk shipping , BDRY, was the big winner and printed a 5-week closing high. BOAT, shipping companies, also had a strong week and closed at a 5-week high. Rare earth metals, REMX, also had a trong week along with copper, gold, and silver miners.
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.
The Teucrium Agricultural ETF, TAGS. Click to enlarge.
Invesco Base Metals Fund, DBP. Click to enlarge.
Invesco Precious Metals Fund, DBP. Click to enlarge.
DBB / DPB. Click to enlarge.
Invesco Precious Energy Fund, DBE. Click to enlarge.
VanEck Oil Refiners ETF, CRAK. Click to enlarge.
Tidal ETF Global Shipping ETF, BOAT. 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 for a second week in row. We saw more new highs than lows, and this is logical as the charts are bouncing, at least temporarily from their 2018 support levels.
US Treasury bonds led the bounce, especially the long end of the curve. Investment grade US corporate bonds saw a bounce, as did international bonds and munis. There was no interest, domestically or internationally, for high-yield corporate or municipal bonds.
Bond Performance Year-to-Date Chart.
Click to enlarge.
The YTD remains stable. BIL, the 1-3 month T-bill ETF, remains barely 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.
iShares Core Bond ETF, AGG. Click to enlarge.
iShares 20+ Year Treasury Bond ETF, TLT. Click to enlarge.
iShares 7-10 Year Treasury Bond ETF, IEF. Click to enlarge.
TIP/IEF.
5 Year, 5-Year Forward Inflation Expectation Rate. Click to enlarge.
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 mixed for global equities, though on average they were down. US markets printed 52-week closing lows. Small-caps in emerging and developed markets closed higher. Emerging markets were up the most, followed by developed ex-us, and then frontier markets.
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 the best of the worst. US Markets are some of the weakest in the world.
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 the most strength in emerging Americas markets including Chile, Brazil, Mexico, and Peru. Chile is a year-to-date leader and in a quantitative uptrend with a positive momentum condition. It closed at a 5-week high.
In emerging Asian markets we saw strength from China, the Philippines, and Thailand.
We saw strength in Pacific countries in the developed market. These YTD losers all bounced higher led by Hong King and Singapore.
European and Middle Eastern developed markets most finished higher as well, though none are positive this year-to-date.
Developed Americas markets were mixed with Canada gaining and the S&P 500 falling.
European, Middle Eastern, and African emerging markets were most down, though we saw a bounce from Poland, South Africa, and Hungary.
Here is the same table sorted by year-to-date change.
Click here for the performance table guide. Click the performance table to enlarge.
This year to date there are not many markets to love, though still strong is Chile and Qatar. Saudi Arabia is pulling back harder.
The iShares EAFA Index ETF, EFA. (Developed Markets ex-US). Click to enlarge.
The iShares Emerging Markets ETF, EEM. Click to enlarge.
The iShares Frontier Markets ETF, FM. Click to enlarge.
The iShares MSCI Chile ETF, ECH. Click to enlarge.
The iShares MSCI Qatar ETF, QAT. Click to enlarge.
The iShares MSCI Saudi Arabia ETF, KSA. Click to enlarge.
Comments