Comments
This past year was tumultuous for investors, with geopolitical tensions, Fed rate hikes, and inflation concerns here and abroad -resulting in significant losses across the asset classes. There was no place to hide except in cash or shorting. An October turnaround raised hopes that were dashed quickly as declines resumed. For the year, the S&P 500 Index declined 19%. Small and Mid-Caps did slightly better.
International equities were affected likewise, including facing a rising US Dollar, Covid restrictions in China, and supply chain issues. S&P 500 sectors posted losses, with the exceptions of Energy up 64% and Utilities +1.24%. Divided and Value stocks outperformed (relatively) Growth. As the Fed raised rates, bond yields rose also, driving prices down across the yield curve.
Equities
DJIA, Europe, and China continue Bullish status; Bearish downtrends of S&P 500, R2000, and US Treasury note are flattening; NASDAQ Composite continues Bearish downtrend. Weekly Market Breadth indicators: Bull alert for NYSE and S&P 500, Bearish for NASDAQ 100, and NASDAQ Composite.
Sector Trends
Bullish - Materials, Energy, Financials, Industrials, Staples, Utilities, Health Care, and Gold Miners; Bear Alert: none; Bearish: Real Estate, Communication Services, Tech, and Consumer Discretionary.
Fixed Income
The10 yr. US Treasury Yield fell today, closing at 3.517% down from 3.569% last week. The long-term uptrend is indicated to be weakening.
The 2-year US Treasury Yield closed today at 4.19% down slightly from 4.40% last week. The 2-year yield's rate of rise is slowing. The 10-2 year Yield Curve remains inverted, with the closing spread widening slightly to -0.66.
Currencies
The Australian Dollar, the Euro, British Pound, and Yen are all in Bullish trends vs. US Dollar. The US Dollar Index continues Bearish, closing at 102.74 down from 104.31 last week.
Gold's trend continues Bullish; Base Metals and Copper continue Bullish;
West Texas Light Crude continues its Bearish downtrend.
