There was more bullish news out of the US stock market this week when the list of stocks hitting new 52-week highs hit the highest amount since the end of 2021. There remains a bit of weakness in Technology and the Nasdaq has lagged for about a month now. The overall strength of the market has been quite impressive given this relative under-performance in Technology stocks, with Financials, Industrials, and Transports all hitting new monthly closing highs. Given how strong this bull market has been, it’s very likely Technology stocks begin to catch a bid and the sector rotation continues.
At the same time, Energy stocks hit a 6-month high this week, seemingly out of nowhere. With crude oil prices continuing to look relatively weak, this relative outperformance with the oil companies is an indication of just how strong they are now. As discussed earlier this month, these Energy stocks have been digesting the massive post-covid rally for the last three years. Price has finally hit right around the former highs and given the strong momentum of this move; it would only make sense it finally breaks out of the base that has been forming since the beginning of 2022.
Lastly, commodities put in a very noticeable divergence relative to the S&P 500 last month. With gold cooling off a bit after the impressive rally this year, it’s still finding buyers right at the breakout price and new level of support. With the dollar coming up to the top of its price range, we think it’s more than likely there is some weakness in the next few weeks and commodities, particularly gold and copper, reap the benefits.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. The content is developed from sources believed to be providing accurate information.
The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors