Nvidia weighs on Nasdaq but broad advance across all sectors

The indices were mixed yesterday, Nvidia's weakness (-6.4%) impacting Nasdaq. Volumes were a bit better considering we are still in 'holiday' season. The VIX remained around 16 yesterday - it hit 65 intraday on 5 August, its highest level since Covid in 2020. DJIA +0.59%, S&P 500 flat and Nasdaq -0.23%.

On an equal weighted basis (our measure) the overall market was up +0.56%, all market cap bands were up. Breadth was a respectable 62% (vs 12% on 5 August and a high of the mid 80s% at the end of July) and daily volumes of 7.7b (vs the average daily volume over the last year of 7.9b). On an equal weight basis, one day returns as follows: Mag7 -0.52% (APPL +1.5%, AMZN +0.8%, GOOGL -0.7%, NVDA -6.4%), large +0.41%, medium +0.73%, small +0.69% and micro +0.48%.

On a 1 and 2 week equal weight basis; Mag7 -1.6% and -2.0%, Large caps +1.0% and +2.0%, Medium cap +1.6% and +2.5%, small cap +2.2% and +3.1% and finally Micro cap +1.0% and +3.4%. On a weekly basis the market was flipping between favouring large caps to back to small/micro the following week. Our risk monitor remains in favour of the larger cap stocks but the benign Market is increasingly favouring Micro and Small. Micro Cap stocks had positive relative momentum four weeks ago, this reversed post release of the July nonfarm payroll figures. However over the last two weeks the Market has increasing favoured Small and Micro stocks the one week differential has now reversed.