Intermediate Trends: Equity Leadership Narrows Further Into US Growth

Price breadth held, but only a thin slice beat the S&P 500

Across the week just closed, our equity universe stayed firm in price but narrowed further in relative leadership. Forty-nine of 59 equity ETFs (83%, -3.4pp) held above their 13-week moving average, yet only 9 of 58 ETFs (16%, -3.5pp) outperformed the S&P 500 SPY, leaving a +68pp gap. Leadership stayed concentrated in US growth, technology, Taiwan equity and value, while developed ex-US, emerging markets, low-volatility and cyclical US segments lost relative ground, which leaves equities in a benchmark-led regime rather than a broad participation advance.

In fixed income, 9 of 17 ETFs (53%, -23.5pp) held above their 13-week moving average, while 11 of 16 ETFs (69%, -6.2pp) still outperformed the Aggregate Bonds AGG as credit, EM debt and short-duration exposures held up better than treasuries, mortgage-backed securities and long duration. A duration-led split persists inside bonds rather than a uniform recovery across our coverage.

In specialty, 11 of 15 ETFs (73%, unchanged on the week) stayed above their 13-week moving average, but only 3 of 15 ETFs (20%, unchanged on the week) beat the S&P 500 SPY, with semiconductors, momentum and clean energy carrying the relative strength as gold, miners and crypto stayed below their moving averages. Commodities split in the same direction, with Oil USO moving back above its 13-week moving average as broad commodities weakened, so confirmation remains concentrated in a narrow set of risk exposures across our universe.

13-Week Intermediate Breadth

Key Takeaways

• Within equity, Communication Services XLC, Consumer Discretionary XLY, and India INDA crossed below their 13-week moving averages at the close. Consumer Staples XLP crossed above its 13-week moving average on a -2.18% 13-week return, which marks a defensive rotation inside US sector and country signals.

• Against the S&P 500 SPY, Emg. Markets EEM and Russell 2000 IWM fell below their ratio moving averages even though their 13-week returns stayed positive. US Broad Market VTI moved above its ratio moving average versus SPY on a flat 13-week return. The move marks stabilization inside the benchmark leader rather than fresh leadership beyond it.

• Within bonds, Mortgage-Backed MBB broke below both its price moving average and its ratio moving average versus Aggregate Bonds AGG. Corporate Credit VCIT and TIPS TIP also crossed below their 13-week moving averages in price, yet both still outperformed the benchmark, which keeps the weakness centered on rate sensitivity rather than a full credit unwind. Oil USO, with a +22.29% period return, crossed above its 13-week moving average. Broad Commodities PDBC moved the other way and closed below its 13-week moving average, which leaves the commodity impulse concentrated in oil.

FEATURED ETF — United States Oil Fund LP USO

Other Technical Signal Events

EQUITY

↗ Price breakouts (cross-up 13W MA)

• XLP - Consumer Staples Select Sector · 13W perf: -2.2%

↘ Price breakdowns (cross-down 13W MA)

• XLY - Consumer Discretionary Select Sector · 13W perf: +0.6%

• XLC - Communication Services Select Sector · -4.6%

• INDA - iShares MSCI India ETF · -5.3%

↗ Leadership gains (cross-up 13W MA vs SPY)

• VTI - Vanguard Total Stock Market · 13W relative perf: unch.

↘ Leadership losses (cross-down 13W MA vs SPY)

• EEM - iShares MSCI Emerging Markets ETF · 13W relative perf: +2.4%

• IWM - iShares Russell 2000 ETF · +2.2%

• COPX - Global X Copper Miners ETF · -8.3%

FIXED INCOME

↗ Price breakouts (cross-up 13W MA)

None for the week

↘ Price breakdowns (cross-down 13W MA)

• TIP - iShares TIPS Bond ETF · 13W perf: -0.3%

• MBB - iShares MBS ETF · -0.8%

• VCIT - Vanguard Intermediate-Term Corporate Bond · -0.9%

↗ Leadership gains (cross-up 13W MA vs AGG)

None for the week

↘ Leadership losses (cross-down 13W MA vs AGG)

• MBB - iShares MBS ETF · 13W relative perf: +0.1%

SPECIALTY

No event for the week

COMMODITIES

↗ Price breakouts (cross-up 13W MA)

• USO - United States Oil Fund LP · 13W perf: +22.3%

↘ Price breakdowns (cross-down 13W MA)

• PDBC - Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF · 13W perf: +6.6%

↗ Leadership gains (cross-up 13W MA vs SPY)

None for the week

↘ Leadership losses (cross-down 13W MA vs SPY)

None for the week

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.