Risk assets continue to run pushing the US market higher as Mag7 lags. US indexes all up on Wednesday.

The US Indexes were all higher on Wednesday following Tuesday's retreat. The riskier assets performed best for the fourth day running. The VIX was down slightly to 19. The main indexes were; DJIA +0.79%, S&P 500 +0.47%% and Nasdaq +0.28% (Mag7 +0.03%). On an equal weighted basis (our measure) the overall market was +1.66%. Breadth was strong at 78% (range of 12% to 88% over the last six weeks) volumes were light at 7.8b (the average daily volume over the last year of 8b). 

One day returns as follows - equal weight basis: Mag7 +0.03% (NVDA +3.1%, TSLA +0.8%), large cap +0.72%, medium cap +0.9%, small cap +1.7% and micro cap +2.1%.

On a 1 and 2 week equal weight basis respectively; Market +3.2% and +2.9%, Mag7 -0.7% and +0.9%, Large caps +1.2% and +1.4%, Medium cap +1.9% and +2.4%, Small cap +3.9% and +3.7% and finally Micro cap +3.6% and +3.0%. 

Our risk monitor remains in favour of the larger cap stock but Small and Micro have now outperformed the market on both a 1w an 2w period. Micro caps have underperformed the market by 18% over the last 12 months.

The sector bias favoured the Bull sectors on Wednesday with the addition of Utilities. The higher risk end of the market performed well again of the fourth day running. Healthcare was strong again yesterday is now the strongest sector over the last five days and has outperformed the market over the last 2 weeks. Micro cap Biotech outperformed the market by 1.6% yesterday. This sector has generated negative returns over the last three months but when it runs it runs very aggressively - it was +55% from mid Nov23 to Feb24. Too early to say the is the start of another run but it is worth watching. Electric Utilities continued to run with the early stage nuclear companies (OKLO +42%, SMR +40%, NNE +38%) and clean energy tech (AMPS +24.5%, XCH +17.1%, EVGO +10.8%, BEP +9.8%, NPWR +8.2%) leading the way, this follows Google's deal with Kairos on nuclear energy earlier in the week. Another beneficiary of the Google/Kairos deal was the Uranium stocks which were very strong yesterday +10.2% (LEU +26.3%, UUUU 15.4%, DNN +12.9%, NXE +10.5%, UEC +8.5%, UROY +8%, CCJ +7.9%) these stock have had a strong recent run as awareness of nuclear energy expansion has increased and questions have arisen over possible supply issues. Tech underperformed on Wednesday, Blockchain continues to seesaw and was very strong yesterday after weakness on Tuesday, +6.2% on the day (DHIG +17.8%, BTCM +17.1%, CIFR +14.4%, WULF +12.8%, APLD +10.3%, HUT +9.6%, BTBT +9.3% BTDR +7.5%, COIN +7.2%). Semicon was soft again after the recent strong run.

A notable number of 52 week highs in virtually all sectors ex Energy: Basic Materials (Gold, Silver, non-paper Packaging), Consumer Cyclicals saw a very high number (across the sector ex auto), Financials exceptionally high number (across the sector), Industrials had an exceptional number again (across the sector ex Transport) and Technology (Software & IT Services and Technology Equipment again), Real Estate (Residential & Commercial REITs), Utilities (Electric and IPPs). Note that most of the sectors and industries mentioned have been strong for a number of days.

Notable high volumes in Consumer Cyclicals (across the sector again), Industrials (across the sector) and Technology (Software & IT Services again)