Equity and Fixed Income markets around the globe were under pressure again last week. Even the seemingly bulletproof Commodities came under pressure last week, leaving the U.S. Dollar as the lone haven asset.
U.S. Equities
The S&P 500 remains under pressure after another attempt at breaking above the 40-week moving averages was repelled by the bears. The index closed below the declining 10-week moving average to keep the 4,200-support level in play. The declining 14-week RSI points to momentum continuing to shift in favor of the bears.
The S&P Small Cap 600 closed on its lows last week after a rally attempt could not be sustained. The index is below the declining 10 and 40-week moving averages and is on the verge of testing support near 1,220. The 14-week RSI is moving lower, now testing the 40-level.
The relative trend is bearish below resistance, though we note that the group outperformed last week.
The NASDAQ 100 closed the week below the 10 and 40-week moving averages, in the support zone between 13,000 and 14,000. The 14-week RSI has been in a downtrend since November, indicating that momentum is shifting in favor of the bears.
On a relative basis, it was another week of underperformance as the ratio moved further below the resistance level.
U.S. Fixed Income
The 10-Year Note was lower again last week, extending its move below the declining moving averages. The 2018 lows are now being tested. More importantly, Treasuries continue to move lower with equities, failing to provide a port in the storm. We believe that if this trend continues, it could be a risk as it would change a trend that has been in place for more than two decades.
The yield continues to move to the upside, keeping the 3% level in its sights.
After a one-week reprieve, the yield curve resumed its flattening trend, as rising rates were more pronounced at the short-end.
Global Equities
The Global Dow has moved below the 10 and 40-week moving averages, unimmune to the weakness playing out in the U.S. equity markets. While the trend remains neutral, there is a bearish bias to the price action. Support at the March lows is a key level for bulls to defend.
The relative trend remains below resistance in a choppy consolidation that has marked trading for more than a year.
Commodities
The Bloomberg Commodity Index remains in an uptrend, above the rising 10 and 40-week moving averages. However, the group was not spared from an overall de-risking across asset markets last week. The key for the bulls now is to break above 140.
The 14-week RSI is near overbought levels, confirming the bullish price action.
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