Daily Tactical: US Growth Carries a Narrow Equity Rebound

Price participation improved, relative leadership stayed concentrated

At the close, equity participation recovered, but leadership across our ETF universe stayed tightly concentrated in US growth and a few defensive pockets. 35 of 59 ETFs (59%, +17.0pp) held above their 20-day moving average, up from 42%, yet only 9 of 58 (16%, +1.7pp) outperformed the S&P 500 SPY, leaving a +44pp gap. Technology, energy and consumer staples did the relative heavy lifting. Low-volatility, developed ex-US and emerging markets moved back above their 20-day moving averages without confirming against the benchmark.

In fixed income, defensive rotation held. Just 1 of 17 ETFs (6%, unchanged on the day) held above their 20-day moving average, while 11 of 16 (69%, -6.2pp) beat the Aggregate Bonds AGG, leaving a -63pp gap. Short duration, inflation-linked exposure, munis and spread product held up relatively better than long-duration Treasuries and rate-sensitive investment grade.

In our specialty coverage, participation kept deteriorating. 7 of 15 ETFs (47%, -6.7pp) held above their 20-day moving average and only 2 of 15 (13%, -6.7pp) outperformed the S&P 500 SPY. Semiconductors and clean energy are the only clear relative leaders, while Bitcoin Trust IBIT fell below its 20-day moving average. In commodities, Agriculture Basket DBA reclaimed its 20-day moving average and copper outperformed SPY, though that relative move still reflects stabilization.

20-Day Tactical Breadth

Key Takeaways

• Price participation broadened beyond the largest growth names through Equal Weight S&P 500 RSP, Financials XLF, Communication Services XLC, Healthcare XLV, Dev. Markets EFA and Europe VGK crossing above their 20-day moving averages. Cross-timescale relative leadership versus S&P 500 SPY still sits with US growth, technology, value and South Korea. International beta and defensive low-volatility equity still lag.

• Inside fixed income, the market shows a duration split. Short-duration inflation-linked exposure remains the lone pocket above its 20-day moving average. Investment Grade Credit LQD crossed below its ratio moving average versus Aggregate Bonds AGG. The main pressure stays on rate-sensitive duration as long Treasuries and mortgage exposure continue to lag across our bond coverage.

• Across specialty and commodities, leadership quality weakened in one area and turned tentative in another. Momentum Factor MTUM crossed below its ratio moving average versus S&P 500 SPY despite a positive 20-day return. Leadership faded. Agriculture Basket DBA with a +4.48% period return crossed above its 20-day moving average. Copper CPER moved above its ratio moving average versus SPY with a still-negative 20-day relative return.

FEATURED ETF — Invesco DB Agriculture DBA

Other Technical Signal Events

EQUITY

↗ Price breakouts (cross-up 20D MA)

• VGK - Vanguard FTSE Europe · 20D perf: -1.95%

• EFAV - iShares MSCI EAFE Min Vol Factor ETF · -1.80%

• XLF - Financial Select Sector · -1.69%

• EWG - iShares MSCI Germany ETF · -1.51%

• XLC - Communication Services Select Sector · -1.49%

• EFA - iShares MSCI EAFE ETF · -1.20%

• XLV - Health Care Select Sector · -1.15%

• IMTM - iShares MSCI Intl Momentum Factor ETF · -0.76%

• RSP - Invesco S&P 500® Equal Weight ETF · -0.49%

• ACWV - iShares MSCI Global Min Vol Factor ETF · unch.

↘ Price breakdowns (cross-down 20D MA)

None on the close

↗ Leadership gains (cross-up 20D MA vs SPY)

• XLP - Consumer Staples Select Sector · 20D relative perf: unch.

↘ Leadership losses (cross-down 20D MA vs SPY)

None on the close

FIXED INCOME

↗ Price breakouts (cross-up 20D MA)

None on the close

↘ Price breakdowns (cross-down 20D MA)

None on the close

↗ Leadership gains (cross-up 20D MA vs AGG)

None on the close

↘ Leadership losses (cross-down 20D MA vs AGG)

• LQD - iShares iBoxx $ Investment Grade Corporate Bond ETF · 20D relative perf: -0.27%

SPECIALTY

↗ Price breakouts (cross-up 20D MA)

None on the close

↘ Price breakdowns (cross-down 20D MA)

• IBIT - iShares Bitcoin · 20D perf: +0.65%

↗ Leadership gains (cross-up 20D MA vs SPY)

None on the close

↘ Leadership losses (cross-down 20D MA vs SPY)

• MTUM - iShares MSCI USA Momentum Factor ETF · 20D relative perf: +3.23%

COMMODITIES

↗ Price breakouts (cross-up 20D MA)

• DBA - Invesco DB Agriculture · 20D perf: +4.48%

↘ Price breakdowns (cross-down 20D MA)

None on the close

↗ Leadership gains (cross-up 20D MA vs SPY)

• CPER - United States Copper LP · 20D relative perf: -0.45%

↘ Leadership losses (cross-down 20D MA vs SPY)

None on the close

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.