US equities finished mostly higher Monday, following a third-straight weekly gain for the Dow and S&P, with growth outperforming value after lagging last week. Treasuries were stronger at the long end of the curve. The dollar was stronger vs yen but weaker vs the euro and sterling. Gold finished up 0.4%. WTI Crude settled up 0.4%.
- Outperformers: Consumer Disc. +3.14%, Tech +2.58%, Communication Svcs. +1.25%
- Underperformers: Energy (1.73%), Utilities (1.36%), Industrials (1.16%), REITs (0.99%), Consumer Spls. (0.96%), Materials (0.84%), Financials (0.37%), Healthcare (0.01%)
S&P futures are up 0.7% in Tuesday morning trading after Asian markets traded higher overnight with Australia and Hong Kong each up over 2%. European markets are seeing a broad rally after the EU passed an economic stimulus package. Treasuries are unchanged to a bit weaker at the short end. The dollar is stronger vs both the yen and the euro but lagging sterling. Gold is up 0.6%. WTI Crude is up 2.9%.
Stimulus Passed in Europe
After a long weekend of debate, the EU passed a $2 trillion stimulus bill overnight. The Vanguard FTSE Europe ETF (VGK) has a Bullish ETF rating and has seen the intensity of its relative weakness gradually diminish since the beginning of June. The fund is overbought with bullish Money Flow as it trades above the long-term trend line.
A Closer Look at Sector Rotation
The Communication Services Sector (XLC) Relative to the S&P 500
The S&P 500 Communication Services sector relative to the S&P 500 continues to trade above the rising 200-day moving average and is consolidating in a wide range just below the two-year highs. The RSI remains in bullish ranges, keeping momentum to the upside for now. Trend: Bullish