Magnificent 7 underperforming the wider market, with a pause in the higher risk sector on Tuesday

The US Indexes ended up on Tuesday having been down for most of the day. The Mag7 continues to lag the market The VIX was flat at 15. The main indexes were; DJIA +0.02%, S&P 500 +0.24% and Nasdaq +0.07% (Mag7 -0.61%). On an equal weighted basis (our measure) the overall market was +0.29%. Breadth of 53% (daily range since the election is 9% to 81%). Daily volumes of 11b (the range since the election is 8b to 18b). 

Daily returns on an equal weight basis: Market +0.29%, Mag7 -0.61% (NVDA +0.4%, MSFT +0.3%, AAPL -0.1%, TSLA -0.5%, GOOGL -0.8%, AMZN -0.9%, META -2.8%), large cap +0.62%, medium cap +0.67%, small cap +0.49% and micro cap +0.03%. 

Weekly returns on an equal weight basis: Market +1.5%, Mag7 +1.9% (TSLA +7.8%, AAPL +5.1%, NVDA +5%, MSFT -0.4%, META -0.5%, GOOGL -0.8%, AMZN -2.6%), large cap +%, medium cap +2.2%, small cap +1.5% and micro cap +1.5%.

In mid January our risk monitor tipped in favour of the Micro cap stock for the first time in over 12 months, see the risk monitor on our site.

Energy was the best performing of the traditional sectors with both fossil fuels (oil & gas +1.22%) and renewable energy (renewable equipment +1%) beating the underlying market. Basic Materials was the second best performing sector. Chemicals +1.1% has outperformed the market over the last three days but has consistently underperformed over the last year. Metals & Mining was +0.8%, Lithium stocks -2.6% but Gold +2.2%, Aluminum +1.8% and Iron & Steel +1.3% all performed well albeit the have underperformed the market over the last 6 months. Banking stock +1% continued to push Financials higher at +0.6% on the day. Within Consumer Cyclicals +0.5%, Auto was +2.6% with Auto/Truck parts +3.5% and Auto & Truck Manufacturers were +1.2% with EV stocks performing best. Industrials +0.4% beat the market although this sector has underperformed over the last three months. Transport was +0.7%, Industrial Goods +0.5% (Machinery +0.8% but Aerospace & Defence -0.4% - Aerospace/ evens has underperformed by 6.5% over the last four weeks presumably over DOGE comments on defence spend). Utilities marginal be a the market. Natural Gas +1.7%, reflecting the current cold spell. Water +0.8% and Multiline +0.6% were the best performing Utilities with Electric & IPPs at -0.1% lagging the market. Consumer non-cyclicals were broadly in line with the market with consumer gods conglomerates +1.2%, food and beverage lagged at +0.1%. Real Estate +0.1% lagged the market. Technology was marginally up on the day. Technology hardware +0.7% was pushed higher by semiconductors +1.3% and rumours around Intel break up. Telecom, Fintech and Software were all down. Healthcare -0.3% was the worst performing sector but has generally had a strong run over the last week, Biotech was -0.7%.

A notable number of 52 week highs was seen in the following sectors: Consumer Cyclicals (across the board), Financials (Banking and collective investments) Industrials (Industrial goods) and Technology (Software & Services, Technology Equipment)

High volumes were seen in the following sector: Consumer Cyclicals (across the sector), Financials (Banking), Healthcare (across the sector), Industrials (across the sector) and Technology saw a very high number (Software & IT Services, Technology Equipment)