Reply To: Traders Market Weekly: Eyes Up on Retail and Inflation

Helmholtz Watson

] It has been a tough start for the major indices following a tough end to last week. All 11 sectors are lower, so today’s “strength” is being measured in relative terms, which is to say the “strong sectors” are the ones that are down the least. Currently, that is the consumer staples (-0.4%) and utilities (-1.0%) sectors.

The energy sector (-4.4%), which soared 10.2% last week when the S&P 500 declined 0.2%, is the biggest laggard today, following oil ($107.02, -2.75, -2.5%) and natural gas ($7.68, -0.43, -5.4%) prices lower. A Bloomberg report indicated that Saudi Arabia had cut prices for Asian buyers due to weakening demand related to lockdowns in China to curb the spread of COVID.

The biggest drag of all today, however, is the mega-cap stocks. They continue to bleed on de-risking efforts from concentrated positions. Apple (AAPL 153.64, -3.64, -2.3%), Microsoft (MSFT 266.24, -8.49, -3.1%), Alphabet (GOOG 2277.48, -35.72, -1.5%), Tesla (TSLA 818.08, -47.57, -5.5%), and NVIDIA (NVDA 176.51, -10.24, -5.5%) are all taking another turn lower.

The Vanguard Mega-Cap Growth ETF (MGK) is down 2.9% while the Invesco S&P 500 Equal Weight ETF (RSP) is down 1.9%, demonstrating that there is plenty of weakness to be found. The Advance-Decline line also denotes as much. Decliners lead advancers by a 5-to-1 margin at both the NYSE and Nasdaq.