SPDR S&P 500 (SPY)
iShares Russell 2000 (IWM)
S&P Midcap 400 (MDY)
SPDR DJIA (DIA)
PowerShares QQQ (QQQ)
SPDR S&P Dividend (SDY)
SPY held above $200 per share, peaking at $204 yesterday. A challenge of previous highs could come soon if the market continues climbing at its current pace. IWM cleared $109 on Tuesday before retreating today. While consolidation of gains may occur over the next few days, recent performance is an optimistic sign for the weeks ahead.
iShares Nasdaq Biotech (IBB)
SPDR Biotech (XBI)
SPDR Pharmaceuticals (XPH)
Valeant Pharmaceuticals (VRX) hampered the biotech and pharmaceutical sectors a week ago, but has rallied by 28 percent since Monday. Both sectors are looking to turn around their relative performance and they may get a chance if the recent rally consolidates as shares are relatively undervalued following the selloff to begin 2016.
WisdomTree Bloomberg USD Bullish (USDU)
CurrencyShares Euro Trust (FXE)
CurrencyShares British Pound (FXB)
CurrencyShares Canadian Dollar (FXC)
CurrencyShares Japanese Yen (FXY)
WisdomTree Emerging Market Currency (CEW)
Currency markets have been stable over the past week. The U.S. dollar has moved lower, but has not breached any important support levels. The yen and euro held steady and the emerging market currencies pushed higher.
The British pound slid on Tuesday following rumors of Queen Elizabeth II’s support for a British exit (Brexit), while recent polls indicated 50/50 odds for the June referendum. A possible Brexit could be problematic for the pound, and as the vote approaches, the pound may begin trading in correlation with the polls.
United States Oil (USO)
SPDR Energy (XLE)
FirstTrust ISE Revere Natural Gas (FCG)
Global X Copper Miners (COPX)
Market Vectors Coal (KOL)
Market Vectors Steel (SLX)
Crude oil production fell to its lowest level since November 2014 last week. Shale oil can be tapped quickly, which leads to rapid spikes in production as well as rapid declines in production as the wells run dry. Low oil prices led producers to cut investment and drilling for new wells, which is now having the corrective effect of reducing supply. However, while supply is declining, demand has yet to pick up; inventories have jumped to near 2015 highs. The OPEC meeting in Doha on April 16 will include non-OPEC countries including Russia. A meeting between Russia and Saudi Arabia in February produced an agreement to freeze production, but it needs broader support to have a lasting impact.
Commodities have fueled the broader stock market rally, with XLE rising more than 20 percent off its lows and SLX climbing more than 50 percent. If S&P 500 gains consolidate, commodities are likely to pull back, placing SLX at the highest risk due to its rapid run-up.
SPDR Utilities (XLU)
SPDR Pharmaceuticals (XPH)
SPDR Materials (XLB)
SPDR Consumer Staples (XLP)
SPDR Consumer Discretionary (XLY)
SPDR Healthcare (XLV)
SPDR Technology (XLK)
SPDR Financials (XLF)
SPDR Retail (XRT)
Both utilities and consumer staples have been market leaders in 2016, but they may be fading as recession fears decline. The real standout has been industrials. Relative to the S&P 500 Index, industrials bottomed in July 2015 but XLI is now close to its 52-week high.
iShares iBoxx High Yield Corporate Bond (HYG)
iShares iBoxx Investment Grade Corporate Bond (LQD)
Weakness in utilities and consumer staples occurred prevailed last week despite lower interest rates. Treasuries, investment grade bonds and high yield bonds all rallied. The 30-day SEC yield on LQD remains at a healthy 3.5 percent.
SPDR Gold Shares (GLD)
Market Vectors Gold Miners (GDX)
An overdue gold correction appears to be underway. Gold peaked with the European Central Bank’s increased quantitative easing and interest rate cuts, while gold miners peaked with the Fed’s decision to slow the pace of rate increases. Caution is especially warranted for GDX, which could see a significant decline over the coming weeks.