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View From The Top. Week 14.

Edition 0011. 04.09.2022. Week of 04.04 - 04.10.2022.


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 weak commodities led accompanied by a gain in the US dollar which closed at a 52-week high. The rest of the pack was mixed with bonds showing the worst performance in the group, closing at a 52-week low.


Asset Class Year-to-Date Chart.

Click to enlarge.

From a year-to-date perspective, the picture remains clear. Commodities have positive returns this year. The US dollar has modest gains. The negative returns for the equities, fixed income, and real estate continues.

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 the performance table for growth, value, and core saw gains in the value factors. Last week’s leader was mega-cap value. The rest of the table was populated with mid-cap and then it was small-caps that lagged the most. We saw 4-week highs from the mega-cap value and large-cap value factors. Small-cap growth and small-gap pure growth made 52-week lows.


US Equity Factor Performance Year-to-Date Chart.

Click to enlarge.

The year-to-date story changed a little last week. Large-cap pure value continues to lead with mega-cap value now in second position. Small-cap and small-cap pure growth continues to decline.


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 it was the low-volatility portion of the S&P 500 that investors were most interested in. The low-volatility and the high-dividend factors notched all-time closing highs. Pure-growth and high-beta lagged.


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. SPLV, low-volatility, has turned positive on the year. 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 many new 52-week and all-time closing highs. In the mid-cap space, we saw 52-week closing highs and all-time highs from energy and from the food and staples retail industry. Of note, we did see more industries making new lows than new highs in the mid-cap space. We saw the same thing in the small-cap space. We have 52-week highs from the energy sector and the food and staples retail groups while we see more industries making new lows than new highs. Year-to-date, the big winner is the small cap energy industry followed by large and the mid-cap energy industries.


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 agriculture. The DBA notched a 52-week closing high. Next was energy, precious metals, and then we saw a loss in base metals and livestock which made a 4-week closing low.


Commodities Performance Year-to-Date Chart.

Click to enlarge.

The year-to-date story remains largely the same. We did see agriculture, DBA, overtake the livestock index, SPGSLV.


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 64, symbols we follow closed higher. 4, 13, and all-time weekly closing highs expanded. The strength was in agriculture, both grains and softs. The weakness was in base metals and livestock.


Energy – In the energy complex, oil was weak but natural gas lifted the entire space.


Metals – Metals were mixed. Precious out performed base with palladium leading, but gold and silver were up as well. Base metals were all down, except for the noteworthy copper which notched a minimal gain.


Agriculture – Softs were strong led by OJ and sugar. Lumber was the laggard. Grains were very strong led by wheat, oats, and soy.


Livestock – Livestock was the weekly laggard on average.


Commodity related ETFs – These were led by agriculture and agriculture related companies. Gold and silver miners were up while copper miners were down. Shipping was the major laggard.


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 31, of our ETFs recorded 52-week or all-time closing lows. The most carnage was seen in the international space, while US government and corporate bonds suffered the most domestically. Long duration US treasury issues sold off harder short duration.


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, followed by short-term and international TIPS, STIP and WIP. 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 more concerned with economic risks beyond 1 year 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 a rough week for equities around the globe. Frontier markets did finish with a gain and notched a 4-week closing high. The US finished in the middle of the pack. Developed markets small-caps ex-US & Canada lagged.


International Equities Year-to-Date Performance Chart.

Click to enlarge.

The YTD picture remains largely unchanged. While none of our markets, as whole, are positive this year-to-date. Emerging markets ex-China, EMXC, was unseated as the best of the worst by frontier markets, FM. 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.

Developed markets had a strong performance from Norway which recorded a 13-week closing high. Emerging markets saw continued leadership from Turkey and Qatar which managed a 13-week and 52-week closing high respectively.


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 emerging markets space, Brazil continued to lead with Latin American countries including Chile, Peru, and Colombia remaining strong. In the frontier market space, Argentina continued its leadership. In the Developed markets space, Norway, Australis, and Canada remain in the top 3 positions.


Conclusion

From the broadest perspective, we saw commodities lead last week. We know those gains came largely from agriculture and precious metals in the face of US Dollar continuing to rise. Domestic and global real-estate finished the week with losses, as did domestic and global equities and fixed income. We know large and mega-cap value was preferred in the US, as well as low-volatility names. We saw a preference for Energy and food/staples retail at the industry group level. Around the world, the same leadership remains in Norway, the UK, Turkey, Qatar, and UAE. Latin American countries are also strong YTD, though not last week.

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