Market Monitor February 20th

US Markets Decline as Weak Earnings and Economic Concerns Weigh on Stocks

The US stock markets closed lower due to negative outlooks. Walmart dropped 6.5% after a disappointing earnings forecast, raising concerns about consumer spending and putting pressure on banks.

Palantir lost nearly 15% in two days due to planned cuts in defense budgets.

Materialise plunged 35% after an unexpected loss, mainly due to weak performance in its Manufacturing division. Investors remain cautious about worsening market conditions.

Herbalife Ltd reported net sales growth on a constant currency basis for both the fourth quarter and the full year 2024. The company delivered strong adjusted EBITDA results, significantly exceeding guidance and prior year figures.

Market Overview

Major Indices:

S&P 500 ETF (SPY): 610.38 (-0.42%)

• 1 Week: +1.16%
• 1 Month: +0.65%
• 6 Months: +8.58%
• 12 Months: +20.19%

NASDAQ-100 ETF (QQQ): 537.23 (-0.42%)

• 1 Week: +1.69%
• 1 Month: +1.08%
• 6 Months: +11.92%
• 12 Months: +23%

Russell 2000 ETF (IWM): 224.26 (-0.96%)

• 1 Week: +0.29%
• 1 Month: -1.77% (down)
• 6 Months: +1.76%
• 12 Months: +12.19%

Sector Performance

1-Week Leaders:

• Consumer Staples (Strongest)
• Utilities
• Health Care

1-Week Laggards:

• Communication Services (Weakest)
• Materials
• Information Technology

1-Month Leaders:

• Utitlities (Strongest)
• Consumer Staples
• Comunication Services

1-Month Laggards:

• Industrials (Weakest)
• Energy
• Information Technology

3-Month Leaders:

• Information Technology (Strongest)
• Communication Services
• Consumer Discretionary

3-Month Laggards:

• Real Estate (Weakest)
• Energy
• Materials

Market Breadth Overview

• Advancing Stocks: 39.5%
• Declining Stocks: 57.4%
• Stocks Above 200-day SMA: 54.5%
• Stocks Above 50-day SMA: 58.1%

Recent Trends:

• Breadth numbers show declining momentum, with a decrease in stocks above key moving averages.
• Short-term market pressure, especially in small caps (IWM lagging).
• Tech-heavy NASDAQ (QQQ) remains relatively stronger compared to broader indices.

Market Sentiment Summary

• Large Caps (SPY, QQQ): Still in an uptrend but showing some short-term weakness.
• Small Caps (IWM): Struggling, with negative short-term trends.
• Sector Rotation: Defensive sectors (Consumer Staples, Utilities) are gaining, while more cyclical sectors (Information Technology, Energy and Communication Services) are lagging.
• Market Breadth: Weakening slightly, signaling potential short-term consolidation or pullback.