Market Monitor December 09

Highlights

Wall Street saw losses as chip stocks dragged the Nasdaq lower. Nvidia fell 2.6% amid a Chinese antitrust probe, with AMD dropping 5.6% due to doubts about its growth targets.

Investors took profits after a strong year, wary of high valuations and upcoming inflation data. Workday gained 5.1% after news it will join the S&P 500 index, while AppLovin (-14.7%) and Coinbase (-9.6%) declined after missing S&P inclusion.

Broader markets were cautious, reflecting concerns about inflation and Federal Reserve policy.

Market Monitor Analysis

S&P 500 (SPY):

• Short-term (ST) trend is positive, with gains of +0.17% over 1 week and +1.56% over 2 weeks.
• Long-term (LT) trend shows robust performance, up +7.59% in 3 months and +28.84% over 12 months.
• Technical analysis indicates it is consolidating near its highs, above critical moving averages.

Nasdaq (QQQ):

• Outperformed SPY over 1 week (+1.38%) and continues to demonstrate strong LT momentum (+28.87% over 12 months).
• Shows steady upward momentum, supported by significant bullish sentiment in technology stocks.

Russell 2000 (IWM):

• Exhibits weakness in the short term (-1.66% in 1 week) but remains positive over 12 months (+20.65%).
• The chart suggests underperformance relative to larger indices.

Sector Performance

1 Week Performance:

• Energy: Underperformed significantly, leading decliners.
• Technology: Outperformed other sectors, continuing to dominate investor interest.
• Utilities and Real Estate: Showed notable declines.

1 Month Performance:

• Technology: Leads with strong returns, reflecting bullish sentiment in growth stocks.
• Real Estate: Lags considerably, driven by broader market rotations and macroeconomic concerns.

3 Months Performance:

• Technology and Industrials continue their dominance, benefiting from strong market leadership.
• Real Estate and Utilities remain laggards, reflecting defensive positioning by investors.

All info available on our Sector Performance page

Current Breadth Numbers

• Advancing stocks (e.g., +41.9% on December 9) show fluctuating trends but indicate more stocks moving higher than lower.
• Long-term indicators (e.g., SMA(200)+ at 63.6%) reflect overall market strength, with many stocks trading above key averages.
• Breadth data aligns with a bullish environment but suggests some near-term consolidation risks.

All info available on our Market Monitor page

Conclusion

The overall market reflects a strong LT trend led by technology stocks, though recent underperformance in Energy and Real Estate signals sector-specific risks.

The Russell 2000 shows relative weakness, suggesting caution for small-cap investors.