View From The Hill: April-26-2016

Posted on Posted in Views From The Hill

Market Commentary

There will be no comments this evening. However, please see our asset class analysis summary and performance tables on exchange traded funds for further market insight.

Good evening…

 


Chart Analysis and Market Diary

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Asset Class Analysis and Performance Summary

Equities: US stocks remained subdued in today’s trading session, although the Russell-2000 (IWM) gained @ +0.98%. Other international markets were also fairly quiet as investors await the tomorrow’s FOMC monetary policy announcement. However, if you are in Brazil (EWZ) @ +3.15% or the Latin America 40 (ILF) @ +2.33%, perhaps you didn’t get the memo on the upcoming Fed meeting. Volatility or the VIX (VXX) @ -2.04% was today’s biggest laggard in VFTH universe. If I didn’t know any better, I’d say this market has an appetite for risks in lieu of declining earnings and weak economic growth.

Equity Sectors: As I said yesterday, the first shall be last and the last shall be first. Yesterday’s laggards were today’s leaders. Energy (XLE) @ +1.60% made a key bullish reversal an a new 3-month high to recover from its previous day losses. Other signs of strength could be found in Industrials (XLI) @ +0.89%, which is closing in on a new 6-month high, and Materials (XLB) @ +0.81%, which actually did make a new 6-month high.

Fixed Income: Bonds continued to trade incrementally lower as the 20+ Year Treasury (TLT) @ -0.45% fell to a new 1-month low. Making new 5-day lows were the Aggregate Bond Fund (AGG), Treasury Inflation Protection (TIP) and Investable Corporate Bonds (LQD). Like I said previously, this market likes risk and therefore the High Yield Bond (HYG) is displaying remarkable relative strength and outperforming safer fixed income assets for now.

Currencies: The currency markets have been the most static lately and because they are the most sensitive and directly impacted by FOMC monetary policy decisions, not much price action is occurring until then.  The US Dollar (UUP) continues to consolidate while the the Euro (FXE) and Yen (FXY) are showing early signs of breaking down but finding support at their 50-day moving averages for now.

Commodities: Oil has resumed its advance with the US Oil Fund (USO) @ +2.46% supporting the DB Commodity Index (DBC) @ +1.28%. Gold (GLD) @ +0.40% continues to consolidate.

Real Estate: The DJ Real Estate (IYR) and Residential Real Estate (REZ) were relatively unchanged. Home Construction (ITB) @ +0.80% was today’s leader within the group.

 

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