A broad advance but the wider US markets fell on Tuesday

The US Indexes were mixed again on Tuesday, the Mag7 led the S&P and Nasdaq higher again. The VIX was down 1 at 13, this seems too low considering the recent market swings. The main indexes on Tuesday were; DJIA -0.17%, S&P 500 +0.05% and Nasdaq +0.40% (Mag7 +0.81%). On an equal weighted basis (our measure) the overall market was -0.51%. Breadth of 62%was surprisingly high considering the market fell (daily range of 22% to 71% over the last 10 days). Daily volumes of 8.1b (the range since the election is 8b to 13b). 

Daily returns on - equal weight basis: Market -0.51%, Mag7 +0.81% (META +3.5%, AMZN +1.3%, AAPL +1.3%, GOOGL -0.1% and TSLA -1.6%), large cap flat, medium cap, -0.2%, small cap -0.8% and micro cap -0.6%. 

Weekly returns - equal weight basis: Market +1.3%, Mag7 +3.6% ( META +7%, TSLA +3.9%, AAPL +3.2%, AMZN +2.7%), large cap +0.3%, medium cap -0.1%, small cap +0.4% and micro cap +2.2%.

Our risk monitor remains in favour of the larger cap stock. Micro caps have turned recently and have now outperformed the market by 1.7% over the two weeks - this differential has reversed from a peak underperformance of 1.2% two week ago.

Yesterday's Sector performance reversed the trends seen over the last week. Having lagged over the last four weeks, Basic Materials was the best performer led by Silver +3.7%, Gold +2.8% and Aluminum +1.4%. Technology was one of the few Bull market sectors to outperform yesterday, Fintech continued to slide -0.9% and Blockchain -1.8% but Software was +0.9% and Communication & Networking +0.2%. Energy sector outperformed the first time for a week or so, Renewables retreated heavily -4.1% but Fossil Fuels ex Coal were all up with Oil& Gas Equipment +0.6%, Uranium was +0.1%. The Industrial Sector was hit by a reversals in Drone and Space stocks again on Tuesday with Aerospace -2.4%, Electrical Components +0.4% helped by Graphite and Lithium battery technology. Within Consumer Cyclicals, Specialty Retailers was +0.8%, Home Furnishing +3.9%, Computer & Electronics +2.2%. Healthcare was the worst performer yesterday after a couple of weeks of outperformance.

A notable number of 52 week highs was seen in the following sectors: Consumer Cyclicals very strong (across there sector ex Auto, but Hotels and Media & Publishing very strong), Financials, exceptionally high number, particularly Banking & Investment Services, Industrials (Machinery, Tools & Heavy Vehicles). Technology very strong (Software & IT Services, Technology Equipment).

Notable high volumes in all sector: High levels in Basic Materials (Metals & Mining) Consumer Cyclicals (across the sector), Financials (across the sector), Healthcare (across the sector), Industrials (across the sector) and Technology saw a very high number (Software & IT Services, Technology Equipment)