Daily Movers: South Korea EWY Rose 6.2%

Tuesday expressed a pro-cyclical rotation. South Korea EWY rose 6.16%, and the cross-asset field tilted toward higher-beta equity risk over duration and defensives. China FXI fell 1.17%, Consumer Staples XLP dropped 0.94%, Investment Grade Credit LQD lost 0.28%, and Long Treasuries TLT declined 0.27%. Copper Miners COPX rose 5.93% against a 3M downtrend, Gold Miners GDX climbed 4.88%, and Semiconductors SMH advanced 4.52%.

Equity: Korea and miners led, China weakness deepened

Movers

Leaders: South Korea EWY +6.16% (3M: +15.2%), Copper Miners COPX +5.93% (3M: -9.0%)

Laggards: China Large Cap FXI -1.17% (3M: -7.4%), Consumer Staples XLP -0.94% (3M: +2.7%)

3M Leaderboard

Strong: Value Factor VLUE +23.8%, Taiwan EWT +20.3%, Technology XLK +17.1%

Weak: Brazil EWZ -12.9%, Copper Miners COPX -9.0%, China MCHI -8.3%

Fixed Income: Duration under pressure, overseas debt held up

Movers

Leaders: Global Bonds BNDX +0.02% (3M: -0.2%), EM Sovereign Bonds EMB +0.01% (3M: unch.)

Laggards: Investment Grade Credit LQD -0.28% (3M: -1.8%), Long Treasuries TLT -0.27% (3M: -2.8%)

3M Leaderboard (within FI scale)

Strong: High Yield Bonds JNK +0.5%, High Yield HYG +0.3%, Short TIPS VTIP +0.3%

Weak: Long Treasuries TLT -2.8%, Preferred Stock PFF -2.2%, Investment Grade Credit LQD -1.8%

Specialty: Risk-on trade led, defensives lagged

Movers

Leaders: Gold Miners GDX +4.88% (3M: -25.2%), Semiconductors SMH +4.52% (3M: +25.9%)

Laggards: Real Estate VNQ +0.04% (3M: +3.5%), Min Volatility USMV +0.05% (3M: +2.2%)

3M Leaderboard

Strong: Semiconductors SMH +25.9%, Momentum Factor MTUM +15.1%, Biotechnology IBB +7.7%

Weak: Gold Miners GDX -25.2%, Ethereum Trust ETHA -17.5%, Gold GLD -15.2%

Cross-Asset Read

Pro-cyclical rotation framed the session across equities, specialty risk, and duration.
Leadership concentrates in the standing 3M winners, with SMH at +25.9%, XLK at +17.1%, VLUE at +23.8%, and EWT at +20.3%; Tuesday extended the strong uptrends in EWY and SMH, while COPX rose against a 3M downtrend.
Volatility is compressed in seven funds, EFA, EFAV, EWG, AGG, BNDX, EMB, and DBMF, and that configuration leaves the regime as a selective pro-cyclical rotation rather than a broad volatility event.

Romain Gandon
CEO, Quantlake

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results.