The One-Minute Market Report - Saturday, July 29

Stock Exchange, Courses, Shares, Trading, Forex

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In this weekly outlook, I examine the asset classes, sectors, equity groups, and ETFs that led the market higher, and which market segments bucked the trend by moving lower.

By keeping an eye on the leaders and laggards, we can get a sense of where the big money is going and where it's coming from. Signs that market participation is broadening out are continuing to show up in the data. If this trend continues, it will improve the durability of the rally.

The S&P 500 Rally Continues

After making a new 2023 high on Friday, the market is up 19.3% year-to-date.

s&p 500 daily prices 7-28-23

A Look at Monthly Returns

This chart shows the monthly returns for the past year. After a brief pullback in the first week, July is now back in positive territory. Good news on the inflation front has bolstered the case for an end to the Fed's rate hiking cycle.

s&p 500 monthly returns 7-28-23

The Bull Market Continues

This chart highlights the 28.1% gain in the S&P 500 from the October 2022 low through Friday's close. The index is now just 4.5% below its record high close on Jan. 3, 2022.

s&p 500 bull run 7-28-23

The Golden Cross

The market entered a Death Cross configuration (a Death Cross occurs when the 50-day moving average crosses below the 200-day moving average) on March 14, 2022. The Death Cross ended on Feb. 2, 2023. We are now in a Golden Cross configuration, with the 50-day moving average above the 200-day moving average.

The spread between these two moving averages is widening. Today, it stands at 7.3%, more than three times as wide as the long-term average of 2.3%. This wide spread is one of the reasons I'm expecting a pullback of 5% to 7% for the S&P 500. 

s&p 500 golden cross 7-28-23

Major Asset Class Performance

Here is a look at the performance of the major asset classes, sorted by last week's returns. I also included the year-to-date returns as well as the returns since the Oct. 12, 2022 low for additional context.

The best performer last week was Asia equities, led by a strong rebound in China. The worst performing asset class last week was volatility.  

asset class returns 7-28-23

Equity Sector Performance

For this report, I use the expanded sectors as published by Zacks. They use 16 sectors rather than the standard 11. This gives us added granularity as we survey the winners and losers.

Communication services stocks led the way higher last week thanks to a strong move by Google. Utilities, real estate, autos, and healthcare all finished in the red for the week.

s&p 500 sector returns 7-28-23

Equity Group Performance

For the groups, I separate the stocks in the S&P 1500 Composite Index by shared characteristics like growth, value, size, cyclical, defensive, and domestic vs. foreign. After taking a rest, the S&P top 7 came roaring back. Emerging markets were a close second, thanks to the rebound in China. 

equity group returns 7-28-23

The S&P Top 7

Here is a look at the seven mega-cap stocks that have been leading the market all year. 

s&p top 7 returns 7-28-23

The 10 Best Performing ETFs from Last Week

China stocks led the ETF pack last week. 

best etfs 7-28-23

The 10 Worst Performing ETFs from Last Week

Solar energy stocks are struggling this year.  

worst etfs 7-28-23

The 10 Best Performing Stocks from Last Week

Here are the 10 best performing stocks in the S&P 1500 last week. Tupperware is up 300% over the past two weeks. stated, "shares of the financially battered container company are rocketing toward 'meme' stock territory."

best stocks 7-28-23

The 10 Worst Performing Stocks from Last Week

Here are the 10 worst performing stocks in the S&P 1500 last week. Perficient was downgraded by JPMorgan after missing their Q2 numbers.

worst stocks 7-28-23

Final Thoughts

The market made another new high for 2023 on Friday. Once again, it was the mega-cap tech stocks that led the way higher. But there are signs that the market leadership is broadening out. Small-caps and value stocks are gaining ground, and home builders are also doing well. The most recent inflation and GDP reports were better than expected. We might be headed for a soft landing after all.

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Disclaimer: This content is for educational purposes only, and is not an investment advisory service, nor an investment advisor, nor does provide personalized ...

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