Dow breaks 43k, semicon, blockchain and biotech continue to run

The US Indices were all ahead on Monday with the Dow breaking 43k. Nvidia pushed the Mag7 higher (NVDA is +14% over two weeks) and riskier assets performed best for the second day running. The VIX was flat at 20. The main indices were; DJIA +0.47, S&P 500 +0.77% and Nasdaq +0.87% (Mag7 +0.83%). On an equal weighted basis (our measure) the overall market was +0.36%. Breadth was fair at 54% (range of 12% to 88% over the last six weeks) volumes were average at 8.1b (the average daily volume over the last year of 8b). 

One day returns as follows - equal weight basis: Mag7 +0.83% (NVDA +2.4%, AAPL +1.7%, GOOGl +1.0%, AMZN -0.7%), large cap +0.46%, medium cap +0.36%, small cap +0.49% and micro cap +0.25%.

On a 1 and 2 week equal weight basis respectively; Market +1.3% and +0.4%, Mag7 +1.7% and -0.4%, Large caps +1.8% and +1.4%, Medium cap +1.9% and +1.3%, Small cap +1.9% and +0.7% and finally Micro cap +0.7% and -0.3%. 

Our risk monitor remains in favour of the larger cap stocks. Small and Micro stocks have proved far more volatile than the Large and Medium cap stocks over the last eight weeks. Micro caps have underperformed the market by 18% over the last 12 months.

The sector bias favoured the Bull sectors and also the higher risk end of the market again, Energy fell following softness in the oil price. Healthcare is now the strongest sector over the last three days, Biotech was +1.2% yesterday and micro Biotech was +1.3%. This sector has generated negative returns over the last six months but when it runs it runs very aggressively - it was +55% from mid Nov23 to Feb24. Too early to say the is the start of another run but it is worth watching. Google's deal with Kairos power to fund nuclear power for AI data centres helped the Utility sector and Electric Utilities in particular. Tech was strong on Monday, Large cap semicons were +2% on the day, Blockchain was strong again. Semicon has out paced the market over the last week pulled along by Nvidia.

A notable number of 52 week highs in the following sectors: Consumer Cyclicals (across the sector ex auto), Financials (across the sector), Industrials had an exceptional number (across the sector ex Transport) and Technology (Software & IT Services and Technology Equipment again). Note that all of the sectors and industries mentioned have been strong for a number of days.

Notable high volumes in Consumer Cyclicals (across the sector again), Industrials (across the sector) and Technology (Software & IT Services again)