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- The dark side of wealth creation.
- Can deficit spending lead to bifurcation?
- Has the S&P 500 index hit major resistance?
- The world’s strongest currency.
Weekly Summary (May 20–May 24, 2024)
U.S. stock exchanges and bond markets will be closed on Monday, May 27, for Memorial Day.
- Stocks and bonds finished the week unchanged.
- Precious metals and energy prices fell while grains gained.
- The US dollar index ended the week with small gains.
The rebound in large-cap stocks (SPY) stalled after four consecutive winning weeks. Tech stocks (QQQ) gained 1.4%, with NVDA surging 15.1% for the week. Small caps (IWM) were down 1.3% and are still down 12.3% from their all-time highs.
The high-beta large caps (SPHB) fell 0.4%, but the low-volatility large caps (SPLV) plunged 1.6% due to broad stock market selling.
The Dow Jones Industrial Average (DIA) ended the week down 2.3%. Only four stocks gained for the week: MSFT (+2.4%), WMT (+1.1%), IBM (+1.1%), and AAPL (+0.1%), while HD and BA each lost 5.6%, and MCD fell 5.2%. This was the DIA ETF’s worst week since a 4.3% loss in the week ending March 10, 2023.
Despite widespread selling, the magnificent 7 equal-weight index rose 2.5% for the week, mainly due to a 15.1% increase in NVDA.
The DBC ETF fell 0.8%, primarily due to losses in energy and precious metals. Gold (GLD) plunged 3.5% for the week. The US dollar index (UUP) is up 0.4%. Note that gold (GLD) has outperformed the SPY ETF since 2022 by a wide margin, with a return of 26.3% versus 15.4%, respectively.
The TLT ETF ended the week unchanged, down 6.4% year-to-date but down 41.7% from all-time highs. Since January 3, 2022, the TLT ETF has been down 33.8%, while large-caps (SPY) have gained 15.4%.
The energy sector (XLE) fell the most, at -3.8%. The real estate sector (XLRE) lost 3.6%, and it is down the most year-to-date by 6.1%. Only the technology (XLK) and communications services (XLC) sectors were up for the week, by 1.6% and 0.4%, respectively.
The dark side of wealth creation
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Specific disclaimer: This report includes charts that may reference price levels. If market conditions change the price levels or any analysis based on them, we may not update the charts. All charts in this report are for informational purposes only. See the disclaimer for more information.
Disclaimer: No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.
Charting and backtesting program: Amibroker. Data provider: Norgate Data
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