Daily Movers: South Korea EWY Sank 3.0%

Thursday fit a selective de-risking pattern. South Korea EWY set the tone, and weakness extended into emerging markets EEM, long Treasuries TLT, preferred stock PFF, and real estate REET. EEM fell 1.07%, TLT dropped 0.58%, PFF lost 0.72%, and REET declined 1.02%. Energy XLE rose 1.48%, EAFE Min Vol EFAV gained 0.71%, managed futures DBMF added 0.78%, and Biotech IBB advanced 0.61%.

Equity: Energy and low-vol led, emerging markets lagged

Movers

Leaders: Energy XLE +1.48% (3M: +2.8%), Intl Min Vol EFAV +0.71% (3M: +3.0%)

Laggards: South Korea EWY -2.97% (3M: -9.8%), Emg. Markets EEM -1.07% (3M: -3.2%)

3M Leaderboard

Strong: Healthcare XLV +13.6%, Financials XLF +11.9%, Value Factor VLUE +11.0%

Weak: South Korea EWY -9.8%, Brazil EWZ -9.4%, Communication Services XLC -5.0%

Fixed Income: Duration under pressure, credit held up

Movers

Leaders: Short TIPS VTIP -0.04% (3M: unch.), High Yield Bonds JNK -0.06% (3M: +0.7%)

Laggards: Preferred Stock PFF -0.72% (3M: -2.1%), Long Treasuries TLT -0.58% (3M: -3.0%)

3M Leaderboard (within FI scale)

Strong: High Yield Bonds JNK +0.7%, High Yield HYG +0.6%, Short Corporate VCSH +0.3%

Weak: Long Treasuries TLT -3.0%, Preferred Stock PFF -2.1%, Investment Grade Credit LQD -1.5%

Specialty: Biotech and diversifiers led, real estate lagged

Movers

Leaders: Managed Futures DBMF +0.78% (3M: +2.1%), Biotechnology IBB +0.61% (3M: +11.0%)

Laggards: Global REITs REET -1.02% (3M: +2.6%), Real Estate VNQ -0.89% (3M: +1.9%)

3M Leaderboard

Strong: Biotechnology IBB +11.0%, Min Volatility USMV +6.7%, Semiconductors SMH +4.0%

Weak: Bitcoin Trust IBIT -21.0%, Ethereum Trust ETHA -18.7%, Clean Energy ICLN -14.8%

Cross-Asset Read

Selective de-risking framed the cross-asset session: defensive or idiosyncratic winners offset weakness in emerging markets, duration, preferreds, and real estate.
The 3M structure concentrates in equity defensives and quality, with XLV at +13.6%, XLF at +11.9%, VLUE at +11.0%, and IBB at +11.0%; Thursday extended the standing downtrends in EWY at -9.8%, TLT at -3.0%, and PFF at -2.1%, while IBB also extended its standing uptrend.
Volatility expands in DVY, SCHD, SDY, and FTLS, while EWG, EWU, EWZ, AGG, EMB, IEF, ETHA, IBIT, and ICLN sit in compression; the cross-section is selective, defensive, and trend-fragmented.

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.