The headlines don't tell the whole story.

Global Market Indices 

Today's market X-ray shows the returns for each index, asset class, sector, and so on, since the recent low point on June 16th. There have been some remarkable moves higher since then, and you can see what's leading the market and what's lagging behind. For reference, the S&P 500 is up 12.5% since June 16th..

Of the global indices, the NASDAQ is the clear leader, up 16.5% from the low. It was down -28.5% YTD when I published this article last month. 

U.S. stocks have gone up twice as much as non-US stocks. And Emerging Market stocks are struggling to stay above the June low point.

Bonds have rallied 3.7% as investors anticipate that the Fed might be nearing the end of their rate hike operation. I think bond investors may have jumped the gun.

All of the return data in this article is from Morningstar.

Global Asset Classes

Commodities were the best performing asset class earlier in the year but they are undergoing a sharp correction now. Energy and agriculture stocks had been leading this asset class higher before the correction started.

The big winners in the asset class category are US stocks and US REITs.

Stock Market Sectors

Here we see further evidence of the correction in energy stocks, which have only managed to rally 2.5% off the June low. 

The big winners are the beaten-down Consumer Discretionary and Technology stocks. Some in the financial media are calling this nothing more than an oversold bounce, but I think there may be more room to run.

Stock Market Factors

The market X-ray shows that high beta stocks are the most preferred factors during this bounce. Value stocks are struggling to keep up with growth stocks. Small stocks are enjoying a nice rebound.

Commodities

When we drill down into the commodities asset class we only find two that are above water - Natural Gas and Timber. Gasoline and Oil have corrected sharply.

Foreign Markets

India is leading the way higher in this group, while China continues to struggle with lockdowns and a property market that's in disarray. 

Momentum stocks

The chart differs from the others in that it shows the YTD gains for the highest momentum stocks in the S&P 1500 Composite Index. 

Note that the chart is dominated by energy names, even though they have not been participating in the recent rally. 

Stock Styles

The market X-ray shows that value stocks are lagging behind their growth counterparts during this bounce. I still think that value will continue to deliver throughout the rest of year. Growth stocks have gone up twice as much as value. 

Final thoughts

For the rest of 2022, I still like energy, commodities, healthcare and utilities. I lean towards value over growth. I also think 2022 will end up being a better year for non-US markets. The wild card is China, If China goes down, they could drag much of the developing world with them.

Investors apparently believe that the Fed is nearing the end of the rate hike process and they will pivot from tightening to loosening by early next year. However, inflation may force the Fed to tighten more aggressively and for longer than what is being priced in. If we see a lower print on the CPI for July, I think this rally will continue. 

Added to inflation and recession worries is the persistent decline in earnings growth estimates. If estimates for this year and next year continue to come down, I think the market will react badly.

I'm hopeful that we will end the year somewhere around 4500, but we will undoubtedly do some backing and filling along the way. We may have already seen the bottom, and the dip-buyers are acting like their old selves again.