In this weekly market report, we look at the various asset classes, sectors, equity categories, and exchange-traded funds (ETFs) that moved the market higher and the market segments that defied the trend by moving lower.
Identifying the winners and losers allows us to see the direction of significant money flows and their origin.
The S&P 500 had a strong week.
For the week, the S&P 500 was up 5.9%. After five consecutive up days, we are now just 5.0% below the 2023 high water mark, set on July 31. We are 9.1% below the all-time high set on January 2, 2022.
A look at monthly returns.
This chart shows the monthly returns for the past year. November is off to a strong start, after losing ground in August, September, and October.
ZenInvestor.org
The bull market is still below the long term trend line.
This chart highlights the 21.8% gain in the S&P 500 from the October 2022 low through Friday's close. We made considerable progress last week but we still remain below the long term trend line.
The Golden Cross.
The market entered a Golden Cross configuration (a Golden Cross occurs when the 50 day moving average crosses above the 200 day) on February 2, 2023.
The spread between these two moving averages continues to narrow. Today it stands at 2.3%, which matches the long term average.
ZenInvestor.org
Major asset class performance.
Here is a look at the performance of the major asset classes, sorted by last week's returns. I also included the year-to-date returns as well as the returns since the October 12, 2022 low for additional context.
The best performer last week was Blockchain, as Bitcoin continues gain upward momentum.
Small caps did well, as investors sought bargains among the asset classes that have lagged this year.
The worst performing asset class last week was Volatility. The CBOE VIX index fell 30% on the week.
ZenInvestor.org
Equity sector performance
For this report I use the expanded sectors as published by Zacks. They use 16 sectors rather than the standard 11. This gives us added granularity as we survey the winners and losers.
Construction stocks and REITs had a very good week, as mortgage rates cooled a bit from their recent runup.
Energy stocks lagged behind as oil prices gave back some of their recent gains.
ZenInvestor.org
Equity group performance
For the groups, I separate the stocks in the S&P 1500 Composite Index by shared characteristics like growth, value, size, cyclical, defensive, and domestic vs. foreign.
All of the equity groups gained ground last week. The best performing group was small cap stocks. Market participation has broadened once again, which is a healthy sign for the market.
ZenInvestor.org
The S&P Top 7
Here is a look at the seven mega-cap stocks that have been leading the market all year. Microsoft held up the best, while Tesla and Nvidia led the way down.
These seven stocks account for 81% of the total YTD gain in the S&P 500. That's down from 87% just two weeks ago, providing evidence that participation in the bull market is broadening once again.
ZenInvestor.org
The 10 best performing ETFs from last week
Cathie Wood, the brain behind the ultra-high beta ARK funds, had a very good week, capturing the top three spots on the ETF leader board.
ZenInvestor.org
The 10 worst performing ETFs from last week
Oil gave back some recent gains, and managed futures were caught leaning short into a rising market.
ZenInvestor.org
The 10 best performing stocks from last week
Here are the 10 best performing stocks in the S&P 1500 last week.
8x8 surged 46% after Craig-Hallum upgraded it following Q2 earnings beat.
ZenInvestor.org
The 10 worst performing stocks from last week
Here are the 10 worst performing stocks in the S&P 1500 last week.
Paycom's Q3 results came in weaker than Wall Street anticipated. The company's guidance for Q4 and next year also disappointed investors.
ZenInvestor.org
Final thoughts
The S&P Top 7 stocks continue to dominate the market. As the following chart shows, these seven mega-cap tech stocks account for 81% of the S&P 500 YTD gain.
Since the recent market peak on July 31, the S&P 500 is down 5.0% and the Top 7 cohort is down by 6.4%. After several weeks of narrowing market participation, it now looks like leadership is beginning to broaden again. This can be seen in the performance of small and mid cap stocks, which have recently been outperforming large caps.
As this market pullback continues to play out, I will be paying close attention to what's happening with the Top 7. For now, at least, they still call the tune.