Basic Minerals shine in a broad market advance on Thursday

Following Wednesday's better than expected CPI figures and inline PPI figures on Thursday the Market continued to recover yesterday, with a broad advance, although volumes were generally soft. The VIX remains relatively muted as it fell back to 17 - it hit 65 intraday on 5 August, its highest level since Covid in 2020.

DJIA +0.58%, S&P 500 +0.75% and Nasdaq +1% (on the back of Mag7 +1.45%). On an equal weighted basis (our measure) the overall market was broadly up +0.89%. Breadth was 66% (vs 12% on 5 August and a high of the mid 80s% at the end of July) with softer daily volumes of 7.6b (the average daily volume over the last year of 7.9b).

One day returns as follows - equal weight basis: Mag7 +1.45% (META +2.7%, GOOGL +2.3%, NVDA +1.9%), large +0.58%, medium +0.91%, small +1.34% and micro +0.7%. On a 1 and 2 week equal weight basis; Market +0.5% and -2%, Mag7 +3% and +2.7%, Large caps +0.7% and -0.5%, Medium cap +0.4% and -1.7%, small cap +0.2% and -1.5% and finally Micro cap +0.7 and -2.2%. Our risk monitor remains in favour of the larger cap stocks. This performance differential in favour of large cap was magnified after the poor July nonfarm payroll figures and the associated wider Market retreat. Much of the adverse differential reversed in the middle of August. Interestingly the Small and Micro continue to hold up fairly well relative to Large post the August nonfarm figures.

Yesterday's sectors performance favoured the Bull sectors (Basic Minerals, Technology and Consumer Cyclicals) albeit with the exception of Healthcare which was actually the worst performing sector yesterday - this was probably due to profit taking.

Basic Materials was easily the strongest sector driven by both Silver and Gold stocks, both +5% on the day. A notable number of 52 week highs in a few sectors: Financials across the sector, Real Estate (Residential and Commercial REITs) and Technology (Software and IT Services). Notable high volume in Consumer Cyclicals (across the board) and Technology (across the board).

Trending market industries; Metals and Mining traded strongly for the second day with Gold (CDE +19%, BTG +13%, USUA +11%, NG +11%, EQX +10%) and Silver (AG +12%, GATO +12%, EXK +11%, XPL +11%, SVM +10%) stocks pushing the sector higher. Uranium up again yesterday +1.75% (UUUU+3.9%, NXE +2.6%, LGO +2.2%) - Putin has been talking about restricting exports this week.