Market Commentary: If you listen closely, that sound you hear is the collective sigh of relief emanating from Wall Street. Yesterday’s upward move was widely welcomed. Today’s upward move was a happy turn of events. However, that does not mean it is time to throw caution to the wind. After all, it has only been two days, and with most market benchmarks still below their 200-day moving averages, there remains much damage to repair.
The 10-year Treasury yield plunged this past week, hitting a low of 3.85% before moving back up to close at 4.02% today. The 3.85% level was its lowest in nearly two and half years and was a reflection of recession fears. Analysts are crediting today’s upside move in equities, as well as Treasury yields, to comments from Fed Governor Kohn that indicate further interest rate cuts are indeed a possibility.
Sectors: Our sector rankings do not take into account today’s upside action, which was led by the Financial sector’s impressive +5.8% gains. Unfortunately for Financials, that only recovers the action of the previous six market days. Today’s action will likely be referred to as a short-covering rally for the Financial sector, but there is also evidence that some opportunistic value managers were starting to buy. Today’s rally also lifted the defensive sectors of Consumer Staples and Utilities, indicating that a major sector rotation is not taking hold just yet.
Styles: Today’s rally also helped every style grouping. Mid Cap Growth was one of the laggards today, if you can call a +2.8% gain a laggard. Small Cap Blend received the largest bounce of the day with the Russell 2000 Index jumping +3.6%, while its tracking ETF gained +3.9%.
International: The global market correction took its toll on our global rankings this past week. Every category except the European Union has now flipped over to negative intermediate trend status, and the EU is dangerously close. Today’s US stock market rally boosted the prices of all international ETFs traded in the US. We will see how much of those gains are translated back into the international markets during the overnight trading sessions.
The 10-year Treasury yield plunged this past week, hitting a low of 3.85% before moving back up to close at 4.02% today. The 3.85% level was its lowest in nearly two and half years and was a reflection of recession fears. Analysts are crediting today’s upside move in equities, as well as Treasury yields, to comments from Fed Governor Kohn that indicate further interest rate cuts are indeed a possibility.
Sectors: Our sector rankings do not take into account today’s upside action, which was led by the Financial sector’s impressive +5.8% gains. Unfortunately for Financials, that only recovers the action of the previous six market days. Today’s action will likely be referred to as a short-covering rally for the Financial sector, but there is also evidence that some opportunistic value managers were starting to buy. Today’s rally also lifted the defensive sectors of Consumer Staples and Utilities, indicating that a major sector rotation is not taking hold just yet.
Styles: Today’s rally also helped every style grouping. Mid Cap Growth was one of the laggards today, if you can call a +2.8% gain a laggard. Small Cap Blend received the largest bounce of the day with the Russell 2000 Index jumping +3.6%, while its tracking ETF gained +3.9%.
International: The global market correction took its toll on our global rankings this past week. Every category except the European Union has now flipped over to negative intermediate trend status, and the EU is dangerously close. Today’s US stock market rally boosted the prices of all international ETFs traded in the US. We will see how much of those gains are translated back into the international markets during the overnight trading sessions.
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