Micro and small caps push the market higher on Friday - drones, space and blockchain shine

The US Indexes were all up last week. The VIX was down 1 at 14, this seems too low considering the recent market swings. The main indexes on Friday were; DJIA +0.42%, S&P 500 +0.56% and Nasdaq +0.83% (Mag7 +1.25%). On an equal weighted basis (our measure) the overall market was +0.86%. Breadth of 59% (daily range of 22% to 71% over the last 10 days). Daily volumes of 5.9b (the range since the election is 8b to 13b). 

Daily returns on Friday - equal weight basis: Market +0.86%, Mag7 +1.25% (TSLA +3.7%, NVDA +2.2%, AMZN +1%, AAPL +1%, META +0.9%, MSFT +0.1%, GOOGL -0.2%), large cap +0.3%, medium cap, +0.4%, small cap +0.4% and micro cap +1.4%. 

Weekly returns - equal weight basis: Market +2.46%, Mag7 +1.54% (AMZN +5.5%, AAPL +3.3%, META +2.7%, GOOGL +2.5%, TSLA -2.1% and NVDA -2.6%), large cap +0.8%, medium cap +0.4%%, small cap +1.7%% and micro cap +3.8%.

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 Friday. Industrials was the top sector on Friday, Aerospace & Defence +6.3% (the drone stocks were very strong, the space stocks were also strong). Healthcare was in the top three sectors again and is now +5.2% over the last week albeit it is still lagging the wider market slightly since the election. Technology recovered having been the worst performer on Wednesday, driven by Blockchain +3.8%, Computers Phones and Household +2.5%, IT Services +1.4%. Semicon were +2.8%. Energy sector slightly underperformed the market, Renewable Energy Equipment was +1.6% (+14.5% on the week) and Renewable Fuels +1.2%, Uranium bounce back and was +3.2%. In Basic Materials Gold -0.6%, Silver +0.2% and Aluminum +0.1% all underperformed the market. Mining Support +20% (SATL +35.4%), Lithium +1.2%. Utilities underperformed the market, though all sub sectors were up on the day. In Consumer Cyclicals only Hotels & Leisure and Auto beat the market.

A notable number of 52 week highs was seen in the following sectors: Consumer Cyclicals very strong (across there sector but Hotels and Media & Publishing very strong), Financials, exceptionally high number, particularly Banking & Investment Services. Real Estate particularly Commercial REITs and Technology very strong (Software & IT Services, Technology Equipment), Utilities (across the sector ex Water).

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)