Heavy US Market reversal on Fed guidance for 2025

The US Indexes were heavily down on Wednesday following the Fed's reduced guidance re interest cuts in 2025. The VIX was up 11 at 17. The main indexes on Wednesday were; DJIA -2.58%, S&P 500 -2.95% and Nasdaq -3.56% (Mag7 -3.9%). On an equal weighted basis (our measure) the overall market was -3.44%. Breadth of only 9% (daily range of 9% to 71% over the last 5 weeks and the lowest number this year). Daily volumes of 14b (the range since the election is 8b to 14b). 

Daily returns on - equal weight basis: Market -3.44%, Mag7 -3.9% (TSLA -8.3%, AMZN -4.6%, AAPL +1%, MSFT -3.8%, GOOGL -3.6%, META -3.6%, AAPL -2.1%, NVDA -1.1%), large cap -3.3%, medium cap -3.9%, small cap -3.8% and micro cap -3.2%. 

Weekly returns - equal weight basis: Market -5.6%, Mag7 -2.7% (TSLA +3.6%, AAPL +0.6%, MSFT -2.6%, GOOGL -3.6%, AMZN -4.3%, META -5.5%, NVDA -7.5%), large cap -5%, medium cap -5.8%, small cap -6.2% and micro cap -5.3%.

Our risk monitor remains in favour of the larger cap stock but only just.

All Sector and all market cap bands were down heavily on Wednesday: Basic Materials was the best performer yesterday by virtue of strength in Lithium stocks, outside of this Gold -4.6%, Silver -5.3%, Aluminum -4.6%, Platinum -5.5%. Financials marginally outperformed the market with Investment Holding Companies -0.3% and Collective Investments -1.5%. Banking & Investments was the worst performer again at -4.1% and has underperformed the market by 2.9% over the last 4 weeks. Energy -3.1% also slightly outperformed the market with Fossil Fuels the best performer at -3.1%, Uranium was -4% and Renewable Fuels -5.6%. Within Industrials the fall was fairly even across the various sub industries and broadly in line with the market. The cyclical sectors of Healthcare and Consumer Cyclical both under performed the market as would be expected. Real Estate was the worst performer reflecting the realisation that higher interest rates would negatively effect this sector.

A notable number of 52 week highs was seen in the following sectors: Consumer Cyclicals (Hotels and Media & Publishing), Financials, (Investment Holding Companies), Technology (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)