Edition 0017. 06.04.2022. Week of 05.30 - 06.05.2022.
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
Asset classes were mixed. Commodities and the US Dollar Index closed higher while international and domestic equities, bonds, and real estate closed lower. Commodities printed 52-week closing highs. International bonds printed a 52-week closing low.
For US equity factor ETFs, last week the entire complex closed lower. The S&P 500 pure value ETF, RPV, closed the week lower, however remains the only ETF with a YTD gain.
In the large cap space, last week the selling pressure was pervasive. All 8 of the ETFs closed lower. SPYD, the high dividend ETF, and RPV remain in positive territory YTD despite closing last week lower.
From an industry group perspective, they printed more new highs and new lows. Energy printed 52-week highs across the cap-scale. On average, the industry groups were negative across the cap scale. Small-caps were down the least, followed by mid-caps, and the losses were led by large-caps. There was also strength in utilities, materials, and food/beverage/tobacco.
The year-to-date story for commodities is largely about energy and agriculture. Base metals are positive YTD while livestock and precious metals remain below 0 with YTD losses. Last week energy was closed higher and printed a 52-week closing high while agriculture was the laggard and printed a 5-week closing low.
Last week in the broad commodities space, energy finished with the largest weekly gain and printed a 52-week closing high. Livestock was up 14 basis points and printed a 5-week closing high. Metals and agriculture closed lower. Agriculture printed a 5-week closing low.
JO, the coffee ETN, is potentially breaking out and starting a fresh leg higher.
The big winner was gasoline, closing at an all-time high.
Bonds were mostly lower. There was a very small amount of interest in emerging market corporate bonds, short-term domestic munis, and some risky large-leveraged corporate loans.
Inflation expectations using TIP/IEF and the 5-year forward inflation expectations look to have begun their next leg higher. See charts below.
Last week, emerging markets closed higher and printed 5-week highs. The rest of the globe, on average, closed lower. When we zoom in, last week was all about Emerging Markets. Hungary led the gains followed by Colombia, China, and then Turkey.
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 the asset class performance was reminiscent of earlier this year, with commodities and the US Dollar Index closing higher while international and domestic equities, bonds, and real estate close lower. Commodities printed 52-week closing highs. International bonds printed a 52-week closing low.
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 Invesco Commodity Index ETF, DBC. Click to enlarge.
iShares US Treasury Bond ETF, GOVT. Click to enlarge.
SPDR Total Stock Market S&P1500 ETF, SPTM. Click to enlarge.
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. The S&P 500 pure value ETF, RPV, closed the week lower, however retains a YTD gain.
US Equity Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date story remains poor. All of the ETFs dropped into negative territory by February except for RPV, the S&P 500 pure value ETF. The March rally encouraged performance from other value ETFs, however they have all given back those gains. For now, RPV remains in positive territory with a 3.71% YTD gain.
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 pervasive. All 8 of the ETFs closed lower. The group is, on average, almost 19 weeks from their last 52-week closing high.
S&P 500 Factor Performance Year-to-Date Chart.
Click to enlarge.
The year-to-date performance for SPYD, the high dividend ETF, and RPV remain in positive territory despite closing the week lower. The laggards continue to be high beta (SPHB) and pure growth (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, they printed more new highs and new lows. Energy printed 52-week highs across the cap-scale. On average, the industry groups were negative across the cap scale. Small-caps were down the least, followed by mid-caps, and the losses were led by large-caps.
In the large-cap space energy has a 60% YTD gain. Also positive is the telecom services, utilities, food beverage & tobacco, and insurance groups.
In the mid-cap space energy has an almost 52% YTD gain. Also positive is the utilities, materials, and insurance groups.
In the small-cap space energy has a 68% YTD gain. Also positive is food/staples retail and the materials industry groups.
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, energy finished with the largest weekly gain and printed a 52-week closing high. Livestock was up 14 basis points and printed a 5-week closing high. Metals and agriculture closed lower. Agriculture 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. Base metals are positive YTD while livestock and precious metals remain below 0 with YTD losses.
Commodities Performance Table - Detailed.
This table, sorted by year-to-date 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, everything closed higher and printed new closing highs, except for natural gas. Gasoline printed an all-time closing high while oil printed 52-week closing highs.
Metals – Both base and precious were weak. That said, Platinum printed a 5-week closing high with an almost 6.5% gain. Copper and Zinc also closed higher and printed 5-week closing highs. Aluminum printed a 13-week closing low.
Agriculture – In softs, Cocoa and Coffee led. Coffee is breaking out. See the chart below. Coffee printed a 13-week closing high. Lumber continues to decline and closed at a 13-week low with a 45% YTD loss. In grains, soybean and palm oil closed higher. Palm printed a 5-week closing high. There were more new lows than highs. Soybean meal and conola oil printed 13-week closing lows.
Livestock – Livestock was mixed with cattle up and hogs down. Feeder cattle printed a 52-week closing high.
Commodity related ETFs – These ETFs were, on average, higher. The largest gains were from oil refiners, copper miners, and carbon credits. Oil refiners closed at a 52-week high, as did natural gas. Agriculture printed a 5-week closing low.
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, DBB. Click to enlarge.
Invesco Precious Metals Fund, DBP. Click to enlarge.
DBB / DPB. Click to enlarge.
Invesco Energy Fund, DBE. Click to enlarge.
VanEck Oil Refiners ETF, CRAK. Click to enlarge.
Tidal ETF Global Shipping ETF, BOAT. Click to enlarge.
iPath Bloomberg Coffee Total Return ETN, JO. 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 mostly closed lower. There was some buying in the short-term muni bond space (SUB) the shorter term munis printed a 5-week closing high. In the corporate space BKLN closed higher. BKLN tracks the performance of the largest institutional leveraged loans. In the international space emerging corporate bonds printed a 5-week closing high. In the US Government space the long end sold off harder than the short end. Short term TIPS (STIP) printed a 52-week closing low.
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. This looks at inflation expectations as judged by the bond market. Click to enlarge.
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, emerging markets closed higher and printed 5-week highs. The rest of the globe, on average, closed lower.
International Equities Year-to-Date Performance Chart.
Click to enlarge.
The YTD picture remains ugly, despite the bounce from 2 weeks ago. 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 year-to-date performance.
Click here for the performance table guide. Click the performance table to enlarge.
When we zoom in, last week was all about Emerging Markets. Hungary led the gains followed by Colombia, China, and then Turkey. Chile pressed 45 basis points higher, but printed a 52-week closing high. Egypt and Malaysia printed 52-week closing lows.
Developed markets saw strength in New Zealand, Austria, and Canada. Portugal printed a 13-week closing high.
In the Frontier space Pakistan printed an all-time closing low.
YTD, the strength has been in Chile, Brazil, Colombia, Turkey, and Saudi Arabia. Chinese energy has also been performing very well.
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.
The iShares MSCI Canada Index Fund ETF, EWC. Click to enlarge.
The iShares MSCI Brazil Index Fund ETF, EWZ. Click to enlarge.
Global X Funds MSCI Colombia ETF, GXG. Click to enlarge.
The iShares MSCI Turkey ETF, TUR. Click to enlarge.
Global X China Energy ETF, CHIE. Click to enlarge.
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