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In this brief market report, we will take a look at the various asset classes, sectors, equity categories, ETFs, and stocks that moved the market higher, as well as the market segments that defied the trend by moving lower over the past week. The idea is to discern newly emerging market leadership.

Identifying these pockets of strength and weakness can often allow us to see the direction of significant money flows, along with their origin.

June Off To a Positive Start

The first week of June may have lacked 'fireworks,' but it did produce four up-days out of five, for a gain of 1.5% on the week.

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A Look at Monthly Returns

This next chart shows the monthly returns for the past year. This chart brings into focus the powerful rally we saw in May. The market is now in positive territory on a year-to-date basis, up by 2%.  

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A Look at Drawdowns This Year

Here is a closer look at the pullbacks we've had over the last 12 months, using a drawdown chart. The current drawdown is -2.3% from the Feb. 19 high. As you can see, most of the damage done in February through March (down 19%) has been repaired in April and May.

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A Look at the Bull Run Since it Began Last October

The following chart highlights the 62.4% gain in the S&P 500 from the October 2022 low through last Friday's close. We are still below the long-term trendline and it looks to me like we may have a few more bouts of selling before this correction is over.

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Major Asset Class Performance

Here is a look at the performance of the major asset classes, sorted by last week's returns. The best performer was Blockchain, while US bonds performed the worst.

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Major Indices Performance

Last week, blockchain companies led the market higher, bringing the Nasdaq and small-caps along with them. Emerging markets gave back some of their recent gains.

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Non-US Market Returns

This next chart shows last week's returns for non-US markets. They have been leading the US so far this year. Hong Kong and Europe are doing well, while Brazil continues to struggle.

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Equity Sector Performance

Tech had a great week, as did most of the market sectors. Utilities barely finished the week in the black, after a multi-month run-up. 

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Equity Factor Performance

This chart shows the weekly performance of equity factors like quality, value, low volatility, and so on. We can see that companies with high beta were in demand last week. 

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Growth vs. Value

With tech leading the way higher last week, growth outperformed value.

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Commodities

This was one of those rare weeks where silver and gold diverged. Gold gave back a small amount of its strong gains, and silver continued to shine.

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The S&P Mag 7

Here is a closer look at the Magnificent 7 group of stocks. These seven stocks are still down on a year-to-date basis. However, faith in the AI trade might be coming back. 

The big winner this week was Meta Platforms (META), while Tesla (TSLA) took a beating.

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The Mag 7's Dominance is a Drag On Performance This Year

After leading the market higher for the last two years, the Magnificent 7 are now a drag on the S&P 500 index on a year-to-date basis. The other 493 stocks in the S&P 500 are up an average of 2.1% year-to-date. 

Investors are cutting back on the Magnificent 7 stocks, and they instead seem to be looking for other potential AI winners that are trading at better prices.

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The 10 Best-Performing ETFs from Last Week

The big winners last week were silver (SIVR) and blockchain (BLOK). Oil had three ETFs in the top 10 list.

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The 10 Worst-Performing ETFs from Last Week

If blockchain had such a good week, why was the Bitcoin ETF (BITO) the biggest loser? I think it has to do with the fundamentals of the blockchain companies as opposed to the speculative nature of Bitcoin. Over longer time frames, we see a high correlation between these two assets; but from week to week, there can be lots of divergence.

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Momentum Stocks

National Vision Holdings (EYE) has rocketed higher this year, but it's still way below its high water mark set in 2021. Investors want bargains right now, and Hertz looks like it could be a good value play. 

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Final Thoughts

It was a good week, following a very strong month. Can the market rise another 2.3% from here to make a new record high in the near-term? Eventually it will, but there is still a larger-than-usual amount of uncertainty out there regarding tariffs, trade deals, and the tax bill. Trump and Xi are still fighting over tariffs, and things could go south there, which would probably delay our reaching the new high on the S&P 500.

To recap the week's action, investors were doing the following:

• Selling bonds and buying blockchain companies
• Selling Brazil names and buying Hong Kong names
• Selling utilities and buying tech
• Selling value stocks and buying growth stocks
• Selling gold and buying silver
• Selling water utilities and buying oil

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