Major US indices corrected on Thursday with the Nasdaq leading markets lower (-1.08%) while the Dow and S&P 500 gave up -86 bps and -60bps respectively. Under the surface, stock level breadth and sector performance skewed positive as losses were concentrated in Tech (XLK) and Comm. Services (XLC). A reversal from the previous week where Tech/Growth outperformed, and defense and cyclicality lagged. Small Caps as measured by the Russell 2000 (IWM) were a standout to the upside gaining +1.00%, though they remain short of a clear technical break-out.
Eco Data Releases | Friday May 31st, 2024
Date Time | Event | Survey | Actual | Prior | Revised | |
05/31/2024 08:30 | Personal Income | Apr | 0.30% | — | 0.50% | — |
05/31/2024 08:30 | Personal Spending | Apr | 0.30% | — | 0.80% | — |
05/31/2024 08:30 | Real Personal Spending | Apr | 0.10% | — | 0.50% | — |
05/31/2024 08:30 | PCE Deflator MoM | Apr | 0.30% | — | 0.30% | — |
05/31/2024 08:30 | PCE Deflator YoY | Apr | 2.70% | — | 2.70% | — |
05/31/2024 08:30 | PCE Core Deflator MoM | Apr | 0.20% | — | 0.30% | — |
05/31/2024 08:30 | PCE Core Deflator YoY | Apr | 2.80% | — | 2.80% | — |
05/31/2024 09:45 | MNI Chicago PMI | May | 41.5 | — | 37.9 | — |
S&P 500 Constituent Earnings Announcements by GICS Sector | Friday May 31st, 2024
No S&P 500 Constituents release earnings today
The economic calendar presents personal income and spending data on Friday as well as MoM and YoY PCE deflators a latest indicator on the inflation front.
The US 10yr yield is rolling over short of April highs as Crude languishes at near-term oversold levels. Somewhat strangely relative to history the USD and Crude have been positively correlated for much of the past 2 years. However we are seeing broader commodities prices showing some near-term strength which is on our radar. The Bloomberg Commodities Index is pulling back from intermediate-term resistance. A move above would be meaningful in our view.
- BCOM (200-day m.a.| Relative to S&P 500)
- BCOM has sustained overbought momentum through the 200-day m.a. A move above the 108 level would be very bullish for the Materials Sector (XLB) based on our historical trend models
Factor Friday: Commodities ETF’s in Focus
Most of the AUM in the Commodities linked ETF space (Chart 1, below) is concentrated in precious metals funds which take up almost 80% of commodity classified ETF assets as categorized by our friends at ETFAction. However the performance profile in the last few months (Chart 2, below) has shifted in favor of Broad Market Commodities, and that has historically dovetailed with Value and Cyclicality. Both have lagged Growth since early 2023 and we’d need to continue to see broad commodities stack positive performance to underpin a return to cyclical sectors and value exposures as alpha sources.
Chart 1: Commodity Linked ETF AUM
Chart 2: Commodity Linked ETF Performance (Monthly)
Sources: Bloomberg, ETFAction