From the desk of Willie Delwiche.

• If shopping in the Energy (or Consumer Discretionary) sectors, look in the mid-cap aisles. The Energy sector is near the bottom of the large-cap sector rankings, but at the top of the mid-cap rankings.
• Improving relative strength trends for large-cap Food & Staples Retailing and Utilities bear watching as index-level volatility picks up.

From the desk of Willie Delwiche.

Despite government officials trying to explain it away, inflation is running at its highest levels in years or (in the case of producer prices) decades. For now, however, the bond market shows little evidence of concern. After pulling back from 1.75% to 1.15%, the yield on the 10-year T-Note has risen in recent weeks but remains below 1.40%. It has bumped up against that level but has not been able to get through it. German yields have moved higher recently and seem to be giving US yields a green light to break out. Resiliency from Financials even as yields were retreating in Q2 and Q3 also argue for an upside resolution here. The high P/E, speculative growth sectors of the market ran out of steam when yields moved higher earlier this year and they could be vulnerable again if yields make a sustained move to the upside from here.

This is the video recording of the September 9th Town Hall Meeting w/ Willie Delwiche & JC Parets.

09/09/21 2PM ET

From the desk of Willie Delwiche.

Labor Day weekend in Wisconsin usually means one last summer trip up north for one last summer swim in the lake.

For me, this also meant the final jump off the giant raft we built (a ton of steel sitting on 12 barrels, with multiple jumping platforms and a slide that ends six feet above the water). Then, it was time to bring it back to shore to disassemble it for winter storage.  

Driving south toward Milwaukee at the end of the long weekend, I saw all sorts of summer toys being towed home for the winter. While it was not quite as warm as in August and the sunset came a bit sooner than it did in July, it was still a lovely evening and a chance to look back and also look ahead.

From the desk of Willie Delwiche.

• The Real Estate and Health Care sectors are relative strength leaders up and down capitalization levels. The Consumer Staples sector is a relative laggard across the cap scales.
• Health Care strength can be seen on the industry group heat map with positive readings for the Pharma, Biotech & Life Sciences group. While the Consumer Staples sector is weak overall, the large & mid-cap Food & Staples Retailing groups are improving.

This is the video recording of the September 2nd Town Hall Meeting w/ Willie Delwiche & JC Parets

09/02/21 2PM ET

From the desk of Willie Delwiche.

According to Charles Darwin, you cannot make observations without some kind of underlying theory. And if you have any theories about financial markets, you understand thinking about what could or should happen with your investments.  

These concepts can be useful if they help us prepare for what is happening in the markets. But they can also impede or obscure reality.

We can observe and project all we want -- so long as we don't get distracted by the what could and what should that we lose sight of what is. 

I don't see this as an argument in favor of always being bullish or a warning about the risks of needing to be proven right. Instead, it's an encouragement to agnostically acknowledge and operate within the market as it is rather than as we wish it would be.

It’s about pursuing the opportunities that are before us even when they are unexpected. 

Especially when they are unexpected. 

From the desk of Willie Delwiche.

From the desk of Willie Delwiche.

Key Takeaways:

• Median stock has gone nowhere for months
• Bond market trusting Powell more than data
• Commodity strength fueled by broad participation

As discussed in yesterday’s Market Notes, last week’s rally has us questioning whether we remain in the choppy market that has been experienced on many levels for the past few months or if we are poised for some degree of resolution to the upside. Today, we’ll take a closer look at what that could mean across stocks, bonds and commodities. As market depth evaporates ahead of the Labor Day weekend, there is no reason to believe that what we talk about has to happen this week.

• The Financials sector bounced back in the rankings last week, climbing three spots and moving into the second spot overall. Strength within the sector is broadly based as it is at the top of the rankings from an equal-weight perspective.
• Thanks to FB and GOOGL, the Communication Services sector is in the top spot on a cap-weight basis. On an equal-weight basis it ranks below everything except Consumer Staples.
• At the large-cap level, Transports are near the bottom of our industry group rankings. Mid-caps however, are showing strength and small-caps are improving.