Daily Movers: South Korea EWY Surged 11.8%

Thursday registered a pro-cyclical rotation. South Korea EWY surged 11.79% and set the tone across technology-sensitive risk. Communication Services XLC fell 2.68%, Consumer Staples XLP dropped 2.16%, Real Estate VNQ lost 1.16%, and Long Treasuries TLT edged down 0.06%. Technology XLK rose 5.50%, Semiconductors SMH climbed 6.88%, Momentum MTUM gained 5.53%, and Preferreds PFF advanced 1.13%.

Equity: Risk appetite lifted tech and Korea, defensives lagged

Movers

Leaders: South Korea EWY +11.79% (3M: +4.7%), Technology XLK +5.50% (3M: +10.6%)

Laggards: Communication Services XLC -2.68% (3M: -7.3%), Consumer Staples XLP -2.16% (3M: +3.8%)

3M Leaderboard

Strong: Value Factor VLUE +17.6%, Healthcare XLV +15.0%, Technology XLK +10.6%

Weak: Communication Services XLC -7.3%, Brazil EWZ -4.6%, Consumer Discretionary XLY -3.6%

Fixed Income: Credit income led, duration lagged

Movers

Leaders: Preferred Stock PFF +1.13% (3M: -1.0%), High Yield HYG +0.29% (3M: +0.7%)

Laggards: Long Treasuries TLT -0.06% (3M: -2.3%), Short TIPS VTIP -0.04% (3M: unch.)

3M Leaderboard (within FI scale)

Strong: High Yield Bonds JNK +0.8%, Global Bonds BNDX +0.8%, High Yield HYG +0.7%

Weak: Long Treasuries TLT -2.3%, Investment Grade Credit LQD -1.0%, Preferred Stock PFF -1.0%

Specialty: Momentum and chip proxies led, real estate lagged

Movers

Leaders: Semiconductors SMH +6.88% (3M: +7.9%), Momentum Factor MTUM +5.53% (3M: +7.7%)

Laggards: Real Estate VNQ -1.16% (3M: +5.8%), Managed Futures DBMF -0.61% (3M: -0.4%)

3M Leaderboard

Strong: Biotechnology IBB +14.9%, Semiconductors SMH +7.9%, Momentum Factor MTUM +7.7%

Weak: Bitcoin Trust IBIT -14.1%, Ethereum Trust ETHA -13.9%, Clean Energy ICLN -12.8%

Cross-Asset Read

Thursday's pro-cyclical rotation tied equity beta strength to softer duration and defensive lag.
The 3M leadership set concentrates in VLUE (+17.6%), XLV (+15.0%), XLK (+10.6%), IBB (+14.9%), SMH (+7.9%), MTUM (+7.7%), JNK (+0.8%), BNDX (+0.8%), and HYG (+0.7%); today's move extended the standing uptrends in XLK, SMH, and MTUM, and XLC extended its 3M downtrend at -7.3%.
Volatility expands in 4 funds, DVY, SDY, XLP, and FTLS, while 7 funds, EWG, EWZ, FXI, AGG, BNDX, EMB, and IBIT, stay compressed; FXI, EFAV, and IDV also sit overbought, so the regime is selective and beta-led.

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.