In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Selling Spreads
Speaking of leaders, even the strongest stocks have come under pressure in recent sessions. There was no good place to hide toward the end of last week as stocks were being sold indiscriminately. We saw the start of this on Thursday as the market leaders came under serious pressure. Friday, that volatility accelerated as investors shrugged off record earnings numbers and took profits across the board.
Over the past few months, we’ve seen money rotate into defensive groups or growth stocks in sessions where cyclical stocks have sold off. That wasn’t the case last week as the market was a sea of red.
The below chart shows one of the strongest industry groups - Agribusiness, as well as one of the weakest - Biotech. One in a strong uptrend and the other in an ugly downtrend. But, last week it made no difference as sellers were in control of both the leaders and the laggards. This is classic bear market behavior.
