More...
617-529-2913
20 Adams Street | Suite 200 | Boston, MA 02129

Weekly Equity Market Highlights – Where is the Bear?

Growth and Momentum Keep Delivering

Weekly Equity Market Highlights

  • Global equities outperformed bonds by a wide margin over the last 5 trading days
  • Where is the Bear? We know it is lurking behind the scenes but conditions still favor equities over bonds
  • Emerging market equities were the best-performing equity sub-asset class – a reversal from some dismal prior weeks
  • Year-to-date US equities are vastly out-performing international assets – strong home bias plus an appreciating US dollar
  • Earnings season in the US is almost over – a good season was had by most
  • Growth keeps outperforming value but most of the real action is at the sector level and highly dependant on the interest rate environment
  • China’s equity market continues to be very volatile – Trade war jitters have had a much larger effect on Chinese stocks

Countries & Region:

  • Large caps dominated in the last week with the S&P 500 up 1%
  • EM equities have been on a downtrend this year but last week was up 1.1% – part of it was currency related
  • China’s equity market continues to be very volatile. Trade war jitters have had a much larger effect on Chinese stocks
  • Telecom had a nice recovery last week with the global sector index up 2.7% – people continue searching for yield
  • Tech resumed its upward march while Energy stocks keep getting whipsawed by the commodity

Style & Sector:

  • In the US, momentum and growth keep leaping ahead
  • The “Value” comeback seems highly dependent on the path of interest rates
    • When people worry about rising rates “value” stocks take a hit, when they don’t they do well
  • Size or market cap behaved perversely – the larger the cap the better the performance
  • EM equities out-performed last week with Asia doing particularly well
  • LATAM gave back some of the gains from last week
  • A big factor in relative performance rankings is the direction of the US dollar

This Coming Week:

  • Risk Aversion – expect the RAI to jump into the Neutral Zone – Investors keep under-pricing risk
  • Market Internals – expected to remain “balanced” -the technicals do not support a bear market
  • Will growth keep outperforming value? Much depends on the direction of interest rates
  • Will EM equities recover? The Turkey currency crisis merits some attention. Watch out for contagion effects
  • More tariffs on the horizon? Will US stocks react to this? Most of the effect thus far has been on non-US stocks

To read our weekly report including style factor breakdowns please click here

Eric J. Weigel

Global Focus Capital LLC

eweigel@gf-cap.com

___________________________________________________________________________________

Publications:

Weekly Asset Allocation Review – Free

Weekly Equity Themes Review – Free

The Equity Observer (Monthly) – Subscription Required

The Asset Allocation Advisor (Monthly) – Subscription Required

 

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

HTML Snippets Powered By : XYZScripts.com