– REITs and Commodities rallied, while US and International equities declined. Commodities and Intl equities lead ytd.
– Thus far, the worst sectors and styles are starting 2021 with the strongest performance. Large growth stocks are the only style box down ytd.
– Emerging markets have had a strong start to 2021, and speculation in call options has spread to emerging market ETFs.
– Crude oil is up more than 10% ytd, driving broad commodity indices higher. Treasury yields continue to climb.
– Market Risk Index climbs above 90% on deterioration in Monetary and Psychology composites.
– No signs of a let up in speculative enthusiasm from investors.
– The first week of 2021 was an inflationary driven move in asset classes – commodities and Intl stocks rallied, while Treasuries and REITs sold off.
– The same held true for sectors – Energy and Materials climbed more than 6%, and Utilities fell.
– Prices on the 20 Year Treasury fell 3.8%. Prices on corporate bond yields declined as well.
– Bitcoin has gone parabolic, climbing more than 34% in a single week. The move higher in commodities was broad.
– Psychology, Monetary and Valuation composites all deteriorated this week, driving MRI higher.
– Margin debt growth drives Psychology higher. Breadth still looks good.
– Inflation category hurts Monetary composite. ISM Price Index sees the fastest trough to peak turnaround since 1975.
%
Market Risk Index scales from 0 to 100%. Higher readings correspond with higher risk markets. Scores below 25% are bullish. Scores between 25-75% are neutral, and scores above 75% are markets vulnerable to major drawdowns.
Model Category Readings (Percentiles)
