Tuesday was an up and down in equity markets that ended on a down note. Unlike other days over these past few month, market direction was not clear from early trading.
Individual stock performance reflected the muted vibe in the broader markets, with very few companies making major moves on the day. The chart below shows one day performance of individual stocks in the Russell 1000 compared to their ten day volume.
Though there were a few 10-13% movers, that’s a whole lot more muted than the past few weeks, where seeing stocks jumping or cratering 20-35% was fairly common.
Factor -wise markets saw interesting performance today, with high dividend and low volatility stocks outperforming all other factors, with momentum and growth performing the worst. Even though today’s market moves were rather muted, the factor performance suggests at least a temporary flight away from risk and towards stability and safety.
Performance in the fixed income markets today corroborated the flight to safety in the markets, with high yield bonds and bank loans losing out to general bond performance.
Economically, both Consumer Confidence and the Case-Shiller price index came in below expectations providing headwinds to the markets. Corporate earnings were more encouraging, with most major reporters beating or at least meeting expectations, which in these conditions can be considered a positive sign.
Tomorrow GM, GE, Anthem, Archer-Daniels-Midland, Boeing, and Bunge all report earnings, in advance of FAANG Thursday.
Nathan