Euclid Investment Advisory Blog

Review & Analysis at Close July 26, 2021

Comments

Up to now the US and Chinese stock markets have widely diverged in terms of returns. The S&P 500 is making record new highs while the China index is plunging. The Chinese index is now rated last among all the market indices we track. How long can this dichotomy continue without a negative effect on the US and other developed markets. Emerging market indices are Bearish also as China’s weight of the emerging Market index is about one third.

Equities

Indices in the US, and Europe rose for the week. The S&P 500, NASDAQ Composite remain strategically Bullish; with Mid and Small caps lagging. Emerging Markets and China are in Bear markets.

  • Equity Styles:  Large Cap Growth continues to lead vs. Large Cap Value, Small, Mid Cap and equal weight indices.


  • Ranked Sectors:  Leaders - Real Estate, Communication Services, Technology, Finance.
    Laggards - Transportation, Materials, Consumer Staples, Utilities.

Interest Rates

The 30-year US Treasury Bond, and the 10-year Note Yields have had a slight bounce up while downtrends continue. The 2-year note yield rose to 0.22 from 0.21. 

The trend of the Yield curve long term flattened further.

Currencies

The Australian Dollar, the British Pound, and the Euro, while all Bearish, had slight rebound vs. US Dollar. The trend for Gold is down.

The US Dollar rise may weaken as it approaches March 31 high of 93.47.

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