I spent the last week in the UK on vacation and there’s nothing like a bit of distance from markets both physically and emotionally to help give you some much needed perspective.
Each week in these posts I’ve highlighted the key trends at work globally and domestically, and although I don’t enjoy feeling like I’m saying the same thing every week, the fact remains despite the volatility, from a trends perspective very little has changed.
The US continues to underperform the rest of the world, and within the US, small caps and biotech continue to show relative strength. We’re also seeing more financials make it to our watchlist.
Let’s start with a quick overview.
Germany’s $DAX recorded its ninth-straight week of all time highs:-
China ($SSE) is back for another test of those highs:-
Japan via $EWJ is following through:-
The Russell 2000 ($RUT) looks all set to resume its uptrend after a tight consolidation of that breakout:-
Here’s the Russell’s ($RUT) huge week relative to the S&P ($SPX),
and here’s Biotech ($IBB) relative to the S&P ($SPX):-
The new highs in global markets continue to suggest US weakness is isolated, and a rudimentary look under the hood of the US itself reveals there are still plenty of stocks and sectors performing well if you’re prepared to look beyond the big indices. Do more of what’s working, less of what’s not.
Our Marketfy portfolio is certainly working, gaining a further 1.0% to take our performance to +8.7% YTD vs -0.3% for the S&P.
Healthcare remains the most heavily represented sector in our watchlist this week, followed by consumer discretionary and then financials, which continue to improve.
Here’s a sample of just 8 names:-