Euclid Investment Advisory Blog

Review & Analysis at Close December 13, 2021

Comments

The Market may be sensing that Fed Chair Powell may deliver coal instead of goodies at the conclusion of the FOMC meeting this coming Wednesday. Our research shows that only very recently defensive stocks have sprung to life: Consumer Staples, Utilities, and Health Care are ranked right behind Tech, LC Growth and Real Estate.

Given that interest rates have fallen and continue to do so, the Yield Curve is flattening, and inflation is rising, the Market may be anticipating a slowdown of economic activity.

Equities

Despite volatility since November 22, the S&P 500, and the NASDAQ Composite continue strategic Bullish trends; Europe's uptrend weakened; while Emerging Markets, and
China are Bearish.

  • Equity Styles:  Large Cap Growth continues leading Large Cap Value and Mid and Small Caps.

  • Ranked Sectors:  Leaders - Technology, Real Estate, Consumer Staples, Utilities

    Laggards - Energy, Financials, Industrials, Communication Services

Fixed Income

The 30-year US Treasury yield is in a Long Term downtrend; 10-year US Treasury yield fell below its flat Long Term trend; 2- year US Treasury yield rise stopped for now, Long Term trend is up.

The Yield Curve further accelerated its flattening this past week. The spread narrowed to 0.76; expect some widening.

 

Currencies

The Australian Dollar, the Euro, the British Pound and the Yen all continued weakening.

The US Dollar vs. basket of major currencies: US Dollar paused its uptrend, hitting resistance at 96.57, next resistance zone 97.74 to 98.80.

Gold rose slightly but remains in long-term bottoming pattern.

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