Keith Schneider | Jul 06, 2021 12:04AM ET
It is a very strange market…
Small Caps (otherwise known around MarketGauge as Grandpa Russell) were down almost -1.34% for the week, bucking the new all-time highs in both the QQQ’s which was up + 2.6%, and the SPY which was plus 1.67%.
Growth stocks continued leading the charge.
What is interesting is that despite the stellar performance by the SPY and growth stocks, market internals barely budged. They remained neutral. This indicates that last week’s move up was focused on just a few big cap growth/technology names that carry a disproportionate amount of weight within the S&P 500 index.
Despite low rates, High Yield Debt (HYG) continues to underperform the safety of the U.S. Long Bond (TLT). Still, a trend like the current one is indicative of a Risk-Off mindset that is typically bearish for stocks.
Credit markets are often considered smarter (or one step ahead of) the equity markets, so the HYG/TLT trend could be foreshadowing a sell-off. Keep an eye on it.
The big question we believe traders should be focused on right now is, will the credit markets prove right in predicting a crash? Keep your eye on activity in both credit and equity markets in the coming weeks to see which is right, because right now they’re contradicting each other.
This week’s highlights are the following:
This Week in Crypto:
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