In this brief market report, we look at the various asset classes, sectors, equity categories, ETFs, and stocks that moved the market higher and those that moved lower. The idea is to identify newly emerging market leadership.
Identifying the pockets of strength and weakness allows us to see the direction of significant money flows and their origin.
A four day winning streak.
In yet another bout of headline-driven volatility, the S%P 500 reacted to Trump's softened stand vs. China by taking off on a four day run that ended with a 4.6% gain for the week.
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The Death Cross
A death cross happens when the 50 day moving average drops below the 200 day. Market technicians view this as significant in that it confirms the downside momentum on a long-term basis. It's not very useful as a market timing tool because much of the damage has already been done by the time this signal is triggered.
What it does show is that the selloff is likely to continue for an extended period of time. The good news is that the last time we had a death cross was in January 2023, just as the market was about to deliver back-to-back annual gains of 20%-plus.
A look at monthly returns.
This chart shows the monthly returns for the past year. Until last week, April was on track to be the worst month out of the past 12. Now, with the recent rebound, it's possible that April will end up in positive territory.
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A look at drawdowns this year.
Here is a closer look at the pullbacks we've had over the last 12 months, using a drawdown chart. The current drawdown is -10% from the February 19 high.
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A look at the bull run since it began last October.
This chart highlights the 49.5% gain in the S&P 500 from the October 2022 low through Friday's close. We are still well below the long-term trendline and it looks to me like we may have further to go on the downside before this correction is over.
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 returns since the October 12, 2022 low for additional context.
The best performer last week was Blockchain, as Bitcoin bounced off of its recent low. The worst performer was Volatility, as measured by the VIX index.
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Equity sector performance
Tech stocks, especially large cap tech, rallied to lead the market higher last week. The softened stance vs. China may mean that chips and chip equipment may get carved out of the tariff plan.
Additionally, Healthcare had a good week as investors scooped up some bargains in the sector.
On a year-to-date basis, Utilities is the only sector showing positive momentum. Consumer Discretionary is the worst performing sector.
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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.
The best performing equity groups were the Mag 7 and Large Cap stocks. Investors rotated out of defensive names and into cyclicals. Growth outperformed Value.
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The S&P Mag 7
Here is a closer look at the Mag 7. These seven stocks had a great week but are still down on a YTD basis. Faith in the AI trade is being tested.
The big winner this week was Tesla (TSLA), which has suffered serious damage to the brand and Elon Musk's reputation. Tesla remains in a bear market.
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The Mag 7 dominance is a drag on performance.
After leading the market higher for the last two years, the Mag 7 are now a drag on the S&P 500 index on a year-to-date basis. The other 493 stocks in the S&P 500 are only down an average of 0.9% YTD.
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The 10 best performing ETFs from last week
The big winners this week are Global Internet, Bitcoin, and Fintech. Cannabis has made the top 10 list two weeks in a row. Is Cannabis finally pulling out of its nosedive for good? Probably not, but the ETF sure looks cheap.
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The 10 worst performing ETFs from last week
Gold and gold miners sold off as investors rotated into Bitcoin. Oil was down again as a slowing economy weighs on demand.
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Best Performing Stocks
Regenxbio Inc. (RGNX) was the big winner this week as Trump’s FDA sent a bullish signal to the Biotech industry.
Worst Performing Stocks
SAIA Inc. (SAIA) missed their number and guided lower for the rest of 2025.
Final thoughts
Notwithstanding the four day, 4.6% rally in the S&P 500 index, we are still in the middle of a correction. I expect another leg down in the weeks ahead, and perhaps a test of the recent low of 4982. I think that level will hold and a bear market will be avoided. The wild card, of course, is the tariff situation. If negotiations go poorly, we could slip into a recession, which would change my outlook from cautiously bullish to outright bearish.
To recap this week's action, investors were...
- Selling gold and buying Bitcoin
- Selling volatility and buying stocks
- Selling energy and buying semiconductors
- Selling Value and buying Growth, especially Large caps
- Selling Defensive stocks and buying Cyclical names
- Buying the Mag 7 (up 9.4% on average) after weeks of heavy selling