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Last week U.S. stocks had their first weekly decline in a month aimed mortgage losses. Treasuries rose most since March on concerns on the subprime crisis as Standard & Poor’s downgraded 75 U.S. collateralized debt obligations (CDOs) made up of subprime mortgages. No wonder that Financial stocks tumbled and the Chicago Board Options Exchange SPX Volatility Index, or VIX, jumped 11%. During the week the Russell 2000 led the way with a -2.3% loss followed by the S&P 500 -1.2%, the Nasdaq -0.7%, and the Dow -0.4%.

This week’s top performing sectors on a relative basis were Technology and Industrials with a gain of 1.45% and 1.33% respectively. The poor sector performers were Financials with a loss of 2.50% and Health Care with a decline of 1.06%. Additionally, mid cap and small cap value stocks lost 0.25% and 0.65% against growth stocks.

Week in Relative Review #29

Sectors/Sizes	Ratio	Change
Consumer Cyclicals	XLY/SPY	-0.61%
Consumer Staples	XLP/SPY	-0.21%
Energy	XLE/SPY	+0.95%
Financials	XLF/SPY	-2.50%
Health Care	XLV/SPY	-1.06%
Industrial	XLI/SPY	+1.33%
Materials	XLB/SPY	+0.64%
Technology	XLK/SPY	+1.45%
Utilities	XLU/SPY	+0.76%
Mid/Large Cap	MDY/SPY	-0.25%
Small/Large Cap	IJR/SPY	-0.65%

The chart of the normalized ratio of the Financial SPDR (XLF) reveals that the Financials Sector is currently in a free fall whereas the Industrials Sector (XLI) and the Technology Sector (XLK) are in a solid uptrend even though they are a little bit overbought on a relative basis. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.

 

U.S. stocks climbed for a third straight week, sending the &P 500 Index and Dow Jones Industrial Average to record highs, which was mainly driven by the Energy and Materials Sector. As retail sales in June took their steepest drop in two years, which was steeper than the 0.3% anticipated by economists, stocks from the Consumer Cycliclas Sector got hit last week. And the ongoing subprime mortgage crisis caused Financial stocks to retreat another week. During the last week the Dow climbed 2.2%, followed by the Nasdaq with 1.5%, and the S&P 500 added 1.4%. However, the Russell 2000 was lagging behind with a gain of only 0.4%.

This week’s top performing sectors on a relative basis were last weeks best performing sectors Energy and Materials with a gain of 2.12% and 1.88% respectively. The poor sector performers were Consumer Cyclicals with a loss of 1.50% and Financials with a decline of 1.21%. Additionally, large cap stocks gained 0.20% and 0.39% against mid cap and small cap stocks.

Week in Relative Review #27

Sectors/Sizes	Ratio	Change
Consumer Cyclicals	XLY/SPY	+0.43%
Consumer Staples	XLP/SPY	-0.39%
Energy	XLE/SPY	+1.97%
Financials	XLF/SPY	-0.31%
Health Care	XLV/SPY	-0.75%
Industrial	XLI/SPY	+0.25%
Materials	XLB/SPY	+1.00%
Technology	XLK/SPY	+0.45%
Utilities	XLU/SPY	-0.97%
Mid/Large Cap	MDY/SPY	+0.43%
Small/Large Cap	IJR/SPY	+0.39%

The chart of the normalized ratio of the Consumer Cyclicals SPDR (XLY) reveals that the Consumer Cyclicals Sector broke its short-term support line of the recent trading range to the downside. However, the Energy Sector (XLE) is still at the upper line of its steep uptrending trading channel and seems to be extended as energy stocks have been rising faster than the price of Crude Oil in the recent months. The Materials Sector (XLB) is currently in the middle of its uptrending trading channel after managing its breakout last week. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.

Despite rising interst rates and climbing oil prices, U.S. stocks advanced during the last week, giving the S&P 500 Index its biggest weekly gain since April. To summarize last weeks action from a technical perspective: the triple bottom formation in the S&P 500 Index remained intact and the yield on 10-Year U.S. Treasury Note broke its downtrend it had formed over the past couple of weeks (see charts below). The main item on next week’s agenda is the start of second quarter earnings season. While the majority of reports really don’t kick in until next week, two big Dow stocks are scheduled to report in the next five trading days. Alcoa (AA) reports after the close on Monday, and General Electric (GE) reports before the open on Friday. During the last week the Nasdaq climbed 2.4%, followewd by the Russell 2000 with 2.2. The S&P 500 added 1.8% and he Dow 1.5%.

This week’s top performing sectors on a relative basis were last weeks poorest performing sector Energy and Materials with a gain of 1.98% and 1.02% respectively. The poor sector performers were last weeks stronges performing sectors Utilities with a loss of 0.96% and Health Care with a decline of 0.73%. Additionally, mid cap and small cap stocks gained 0.43% and 0.39% against large cap stocks.

Week in Relative Review #27

Sectors/Sizes	Ratio	Change
Consumer Cyclicals	XLY/SPY	+0.43%
Consumer Staples	XLP/SPY	-0.39%
Energy	XLE/SPY	+1.97%
Financials	XLF/SPY	-0.31%
Health Care	XLV/SPY	-0.75%
Industrial	XLI/SPY	+0.25%
Materials	XLB/SPY	+1.00%
Technology	XLK/SPY	+0.45%
Utilities	XLU/SPY	-0.97%
Mid/Large Cap	MDY/SPY	+0.43%
Small/Large Cap	IJR/SPY	+0.39%

The chart of the normalized ratio of the Consumer Cyclicals SPDR (XLY) reveals that the Consumer Cyclicals Sector seems to have found a stable bottom as it recently broke its downtrend and formed a trading range. The Materials Sector (XLB) seems to have made the breakout above its relative highs in the first quarter of the year. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.

U.S. stock indexes rose in the second quarter of 2007, with the Dow Jones Industrial Index (+8.5%) putting in the best performance since 2003, the S&P 500 Index (+5.8%) having its best quarterly advance since the fourth quarter of last year and the Nasdaq (7.5%) its best since the fourth quarter of 2004.

Despite a roller coaster at the stock market last week, in which the FED decided to hold interest rates steady, the Nasdaq finished the week with a small gain of 0.6% followed by the the Dow with 0.4%, and the S&P 500 with 0.03%. The Russell 2000 posted even a small loss of -0.2%. However, the wild ups and downs in the VIX last week indicate that the market participants are still nervous.

This week’s top performing sectors on a relative basis were last weeks poorest performing sector Utilities and Health Care with a gain of 1.56% and 1.37% respectively. The poor sector performers were Materials with a loss of 1.45% and Energy with a decline of 1.32%.

Week in Relative Review #26

Sectors	Ratio	Change
Consumer Cyclicals	XLY/SPY	-0.17%
Consumer Staples	XLP/SPY	0.00%
Energy	XLE/SPY	-1.32%
Financials	XLF/SPY	-0.30%
Health Care	XLV/SPY	+1.37%
Industrial	XLI/SPY	-0.53%
Materials	XLB/SPY	-1.45%
Technology	XLK/SPY	+0.74%
Utilities	XLU/SPY	+1.56%

The chart of the normalized ratio of the Financials SPDR (XLF) reveals that the Financial Sector is in a downtrend since January and the Materials Sector (XLB) is still trying to break out above its relative highs in the first quarter of the year. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.

U.S. stocks dropped and the Standard and Poor’s 500 Index posted its biggest weekly slide since early March on concern that banks will be saddled with losses on mortgage bonds as the 10-month-old High-Grade Structured Credit Strategies Enhanced Leverage Fund, run by Bear Stearns senior managing director Ralph Cioffi, has lost about 20 percent this year and faced pressure from its creditors Merrill Lynch, Goldman Sachs and Bank of America among others. During the week the Dow led the way with a -2.1% loss followed by the S&P 500 -2.0%, the Russell 2000 -1.6%, and the Nasdaq -1.4%. The Chicago Board Options Exchange SPX Volatility Index, or VIX, jumped 13%.

This week’s top performing sectors on a relative basis were Technology and Industrials with a gain of 0.87% and 0.62% respectively. The poor sector performers were Utilities with a loss of 1.72% and Health Care with a decline of 0.85%. Additionally, mid cap and small cap value stocks lost 0.70% and 0.74% against growth stocks.

Week in Relative Review #25

Sectors/Styles	Ratio	Change
Consumer Cyclicals	XLY/SPY	+0.26%
Consumer Staples	XLP/SPY	-0.35%
Energy	XLE/SPY	-0.03%
Financials	XLF/SPY	-0.49%
Health Care	XLV/SPY	-0.85%
Industrial	XLI/SPY	+0.62%
Materials	XLB/SPY	+0.50%
Technology	XLK/SPY	+0.87%
Utilities	XLU/SPY	-1.72%
Mid Value/Growth	IJJ/IJK	-0.70%
Small Value/Growth	IJS/IJT	-0.74%

The chart of the normalized ratio of the Industrials SPDR (XLI) reveals that the Industrials Sector recently broke out of a tight trading range and is still on the rise. The Healt Care Sector (XLV) is still looking for a bottom, as the normalized ratio is near its 10-year low after a sharp decline in the last two months. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.

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Interest rates around the globe have been rising sharply in the last 4 weeks. Therefore, we take a look at the 6 month relative strength charts of eight S&P 500 sectors to check whether the rise had an impact on the markets appetite for different industry sectors. Rising lines indicate the sector is outperforming, while falling lines indicate periods of underperformance. The red dots in each chart indicate May the 8th, the day on which bonds peaked. As the charts illustrate, for the most part, there has been little shift in the trends of sector relative strength now versus before the bond sell-off began. The only three sectors which have seen a major shift in trend are Industrials (improving), Health Care and Utilities (both deteriorating) and the Energy sector still rising.

Last week the stockmarket almost recouped its losses from the previous week as the S&P 500 posted its best weekly gain since April and the Nasdaq even closed on a new 6 year high. During the week the Nasdaq led the way with a 2.1% gain followed by the S&P 500 1.7%, the Dow 1.6%, and the Russel 2000 1.5%.

This week’s top performing sectors on a relative basis were Energy and Utilities with a gain of 2.01% and 1.07% respectively. The poor sector performers were Health Care with a loss of 0.80% and Consumer Staples with a decline of 0.68%. Additionally, mid cap and small cap stocks lost 0.28% and 0.29% against large cap stocks.

Week in Relative Review #23

Sectors/Sizes	Ratio	Change
Consumer Cyclicals	XLY/SPY	-0.27%
Consumer Staples	XLP/SPY	+1.12%
Energy	XLE/SPY	+1.42%
Financials	XLF/SPY	+0.00%
Health Care	XLV/SPY	+0.42%
Industrial	XLI/SPY	+0.29%
Materials	XLB/SPY	-1.22%
Technology	XLK/SPY	+0.68%
Utilities	XLU/SPY	-3.14%
Mid/Large Cap	MDY/SPY	-0.42%
Small/Large Cap	IJR/SPY	-0.54%

The chart of the normalized ratio of the Energy SPDR (XLE) reveals that the Energy Sector is still on the rise and even broke out of its mid-term trend channel to the upside. Last weeks worst performing Utility sector rebounded nicely this week. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.

Stockmarkets endured a rocky week. After hitting a record closing high on June 4th, U.S. stocks had their biggest two day drop since February as comments made by Ben Bernanke, chairman of the Federal Reserve, made markets think an interest-rate cut was much less likely. Despite the moderate rebound on Friday the S&P 500 had its biggest weekly loss in 3 months. During the week the Russell 2000 led the way with a -2.1% loss followed by the S&P 500 -1.9%, the Dow -1.8%, and the Nasdaq -1.5%.

This week’s top performing sectors on a relative basis were Energy and Consumer Staples with a gain of 1.42% and 1.12% respectively. The poor sector performers were Utilities with a loss of 3.14% and last weeks best performing sector Materials with a decline of 1.22%. Additionally, mid cap and small cap stocks lost 0.42% and 0.54% against large cap stocks.

Week in Relative Review #23

Sectors/Sizes	Ratio	Change
Consumer Cyclicals	XLY/SPY	-0.27%
Consumer Staples	XLP/SPY	+1.12%
Energy	XLE/SPY	+1.42%
Financials	XLF/SPY	+0.00%
Health Care	XLV/SPY	+0.42%
Industrial	XLI/SPY	+0.29%
Materials	XLB/SPY	-1.22%
Technology	XLK/SPY	+0.68%
Utilities	XLU/SPY	-3.14%
Mid/Large Cap	MDY/SPY	-0.42%
Small/Large Cap	IJR/SPY	-0.54%

The chart of the normalized ratio of the Utilities SPDR (XLU) reveals that the Utilities Sector is currently in a free fall, whereas the Energy Sector is in a solid up-trend relative to the S&P 500 index albeit the normalized ratio of the Energy SPDR (XLE) is at the upper line of its trend channel. The shaded areas represent two standard deviations above and below the SPDR’s 50-day moving average.