Poljak Group Wealth Management | Shreveport, LA
Weekly Market Insight
Today's Market Recap
Dow (0.26%), S&P 500 (0.79%), Nasdaq (1.55%), Russell 2000 (0.83%)
- US equities were lower in Monday trading as stocks ended a bit off worst levels. Semis, memory both biggest drags, while big tech mostly lower. Other laggards included networking/communications, tech hardware, larger-cap banks, PE, IBs, machinery, multis, airlines, A&D, building products, homebuilders, auto suppliers, hotels, paper/packaging, space, quantum computing; retail favorites, most shorted also weaker. Software better along with broader AI losers group. Other outperformers included energy (crude), managed care, insurers, payments, road/rail, steel, chemicals, dollar stores, food, media, telecom, and entertainment. Treasuries weaker with curve bear flattening, near worst levels; yields up 4-7 bp. Dollar index up 0.3%. Gold finished down 2.6%. Silver was down 3.7%. Bitcoin futures down 3.2%. WTI crude settled up 9.4%, near best levels after Trump talked up 20% SoH toll. (FactSet)
- Another big momentum selloff the focus today following a weak Asia session overnight. Similar to the momentum unwind that preceded last week's stabilization, no notable fundamental catalyst for the move (though talk about earnings risk in memory revolving around DRAM ASPs and HBM mix). Technical talk has continued to revolve around seasonality, leveraged ETF impact and passive flow dynamics. Continued ramp in US-Iran kinetic tensions (and US reimposing SoH blockade) the other big story, driving a rally in oil and backup in rates. When it comes to latter, also some hawkish takeaways from comments out of Fed's Waller (who kicks off a busy week of Fedspeak). Rotation providing some semblance of a cushion, though cyclicals somewhat of a mixed bag. Busy week ahead at both the macro and micro level. This includes CPI, PPI, retail sales, Warsh testimony, bank earnings and a couple of high-profile semi results. (FactSet)
Last Week's Market Recap (Monday, July 6th - Friday, July 10th)
Dow (0.50%), S&P 500 +1.23%, Nasdaq +1.74%, Russell 2000 (0.61%)
- Major US indices were mixed last week, with the S&P and Nasdaq both rising for the fourth time in the past five weeks. However, breadth was fairly narrow: S&P 500 decliners for the week outnumbered advancers, and the equal-weight S&P 500 was slightly lower. (FactSet)
- Despite an up-and-down week, semis and memory were generally higher; logged a weekly gain after two weeks of declines, though remains more than 11% below its 22-Jun ATH (All-Time-High). Big tech was mostly higher. Other outperformers included networking/communications, tech hardware, energy, larger-cap banks, PE, exchanges, commodity chemicals, road/rail, auto suppliers, and China tech. Software was more mixed. Laggards included airlines, A&D, biotech, food/beverage, HPCs, homebuilders, credit cards, and P&C insurers. (FactSet)
- Treasuries were weaker with the curve steepening, continuing the month's yield backup. At the same time, last week's $119B in Treasury auctions were well received, with the 3-, 10-, and 30-year sales all stopping through. The dollar was higher on the yen and euro crosses; DXY +0.1%. Gold dropped 0.3% for the week. Bitcoin futures were up 4.1%. WTI crude +4.3% rose for the first time in four weeks amid heightened Mideast tensions, though those gains were pared a bit later in the week. (FactSet)
S&P 500 Sector Performance (Source: FactSet)
- Outperformers: Tech +3.41%, Energy +3.22%, Communication Services +2.29%
- Underperformers: Materials (2.22%), Healthcare (1.85%), Consumer Staples (1.27%), Industrials (1.11%), Utilities (0.83%), Real Estate (0.36%), Financials +0.06%, Consumer Disc. +0.40%
What happened last week?
- Last week saw some stabilization in the momentum trade, consistent with some analyst commentary that the recent (relatively orderly and limited) pullback has likely been related more to positioning and seasonality than fundamental issues. There were also multiple headlines supporting the AI capex narrative, including META planning a big boost to its compute by next year (Zuckerberg said company needs all the computing it can get), MU accelerating US fab investments, and Anthropic's 20-year lease with WULF. (FactSet)
- At the same time, the widely discussed broadening-out trade struggled amid rising oil and rates. Banks added to their QTD strength (ahead of this week's earnings reports), groups like machinery, food/beverage, retail, and restaurants struggled, and the proportion of S&P constituents below their 50-day moving averages pulled back. (FactSet)
- Geopolitics moved back into consideration with last week seeing several rounds of US-Iran strikes and counterstrikes, sparked by Iranian pressure against Strait of Hormuz shipping not recognizing its self-declared authority. As of Friday, Trump said the US will continue talks with Iran but has said the ceasefire and Memorandum of Understanding are "over." While this has increased uncertainty about the road ahead and pushed crude to its first weekly gain since early June, market expectations for a return to a "hot war" seemed fairly limited. (FactSet)
- It was a fairly light week of economic updates. June ISM Services was in line with consensus though a bit lower m/m; despite some deceleration in new orders and business activity, the report was still seen as supportive of the solid macro backdrop. June existing-home sales saw a sharper-than-expected decline, with the release arguing buyers exhibited affordability concerns. Initial and continuing jobless claims were little changed. (FactSet)
- The Fed released the minutes from its June meeting, but these did not contain any broad formatting changes and largely served to reflect continued divisions on the panel. Fedspeak was fairly thin; Governor Waller spoke about the limits of forward guidance while NY Fed's Williams talked about ongoing risks from above-target inflation. The Fed also announced the leadership for Chair Warsh's five task forces, involving a range of former Fed officials, academics, and representatives from the corporate sector. (FactSet)
This week
- It will be a very big week on the economic front including June CPI and NFIB's small-business optimism (Tuesday); June PPI and NY Fed's Empire manufacturing index (Wednesday); June retail sales, Philly Fed manufacturing, jobless claims, pending-home sales, and NAHB homebuilder sentiment (Thursday); and preliminary July UMich consumer sentiment, housing starts, and industrial production (Friday). (FactSet)
- On the Fed front, the big event will be Kevin Warsh's first delivery of semiannual testimony to Congress (to the House on Tuesday, to the Senate on Wednesday). Other Fedspeak will include remarks from Waller, Goolsbee, Williams, Musalem, Logan, and Jefferson. The Fed will also release its latest Beige Book report on Wednesday. (FactSet)
- The Q2 earnings season starts in earnest with five big financial reporters pre-market Tuesday: JPM, BAC, WFC, C, and GS; MS will be out Wednesday before the bell. Other major reports this week include JNJ, UNH, GE, NFLX, ABT, PLD, PNC, USB, ELV, and TRV. (FactSet)
Key Dates/Data Releases for this week (Source: Market Week)
- 7/13: Consumer Price Index
- 7/14: Producer Price Index
- 7/15: Retail sales
- 7/16: Housing starts, import and export prices, industrial production
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