The market update itself remains positive across the board, with large cap growth leading the pack as a trend continuation. Despite the rate cuts small caps have yet to participate in the upside on the same magnitude.
Some positive developments out of China, combined with a weaker US Dollar for the month, have led to some gains in the Asia Pacific and EM regions, being the best performers on the 1-month and 3-month time-frames. Somewhat left-field, Utilities are now the best performing sector on a YTD basis for the S&P500 which can be somewhat explained by the recent rate cut of 50 bps by the Fed coupled with the increased energy demands by big-tech for the continued rollout of data centres to keep the AI narrative alive.
The best performers for last month was GRID (clean energy/utilities/electrical grid) and FTGC (commodities), with the latter’s performance being explained by an uptick in Crude Oil due to middle east tensions but also a stronger Chinese fiscal/monetary response.
Last but not least the yield curve; it continues to un-invert (see below) with the 2Y/10Y spread finally in the positive territory with all but the shortest of paper still at elevated levels which is likely to come down as a function of further Fed rate cuts.
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