Mag7 leads Nasdaq and S&P higher, blockchain, space and drone stocks all retreat

The US Indexes were mixed on Monday, the Mag7 pushed the S&P and Nasdaq higher. The VIX was down 1 at 13, this seems too low considering the recent market swings. The main indexes on Monday were; DJIA -0.29%, S&P 500 +0.24% and Nasdaq +0.97% (Mag7 +1.79%). On an equal weighted basis (our measure) the overall market was +0.22%. Breadth of 46% (daily range of 22% to 71% over the last 10 days). Daily volumes of 10b (the range since the election is 8b to 13b). 

Daily returns on - equal weight basis: Market +0.22%, Mag7 +1.79% (TSLA +3.5%, META +3.2%, MSFT +1.8%, GOOGL +1.5%), large cap -0.1%, medium cap, -0.2%, small cap +0.2% and micro cap +0.4%. 

Weekly returns - equal weight basis: Market +1.3%, Mag7 +3.6% (TSLA +5.5% META +4.9%, AMZN +4.6% MSFT +2.9%, AAPL +2.9%, GOOGL +2.3% and NVDA +1.9%), large cap +0.1%, medium cap -0.4%, small cap +1.4% and micro cap +2.8%.

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 1.6% two week ago.

Sector wise the Bull market sectors were in favour on Monday. Healthcare was in the top three sectors again and is now +4.3% over the last week albeit it is still lagging the wider market slightly since the election. Technology recovered having been the worst performer mid last week, Fintech -0.6% and Blockchain -4.5% dragged the sector but SemiCon was +2.7% and Online Services +0.7%. Consumer Cyclicals was helped by Department Stores +1.2% (M +4.3%, FIVE +7%, W +4%), Apparel +3.5% (DBI +11.3%, VSCO +7.9%, BOOT +6.5%, GAP +6.4%) and Home Improvements +1.1% (GRWG +7.2%). The Industrial Sector was hit by a reversals in Drone and Space stocks on Monday with Aerospace -1.44% (ACHR -23.7%, EVTL -20.6%, UMAC -19.5%, RKLB -10.2%), Electronic Components +1.2% helped by Lithium and battery technology. In Basic Materials Gold -2.4%, Silver -2% and underperformed the market. Aluminum +1.2% and Lithium +0.8%. Utilities underperformed the market with all sub industries falling. Energy sector was the worst performer Renewable Energy Equipment was +2.9% (+24.5% over 2 weeks) and Renewable Fuels -0.1%, Uranium fell back and was -3.6%.

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, FinTech and Technology Equipment)