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Runprofits Weekly Newsletter Week 13 2024

A Look Through the Indices

In a shortened week for most markets, the German DAX took the lead in indices this week pushing to a new all-time-high up 1.8%. Dollar strength weighed on the US indices with the Nasdaq closing slightly negative on the week. Both Japan and China pulled back almost two percent. Considering it was end of month and end of quarter, all of these are fairly minor changes to what is a bullish, risk-on environment. The significant macro news in the past week being UK GDP coming in as expected while US GDP beat expectations. A weekly heat map of US stock market is shown below - it shows most of the tech stocks pulling back with the exception of Alphabet while Healthcare and Energy outperformed with Aerospace and Defence continuing to rally

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Global Indices, Commodities and Currencies

US Weekly Stock Heatmap

Weekly UK Index Changes

Given it was a four day week into Easter - volumes were lower in the past week but all of the UK indices made advances.

The FTSE 100 added 0.9% making new 2024 highs and eyeing the all-time high from February ’23 of 8047.

The mid cap FTSE250 gained 0.8% remains 19% off tis high of 7/9/21.

The AIM all-share still lags and added 0.4% remaining -2.7% in the red YTD . There are encouraging signs that AIM is beginning to catch-up on the mid and mega caps especially among the AIM 100 shares(the largest by market cap) where almost 60% of shares are above their 200MAs and 50% above their 50MAs.

Breadth in the UK markets turned more bullish especially on the shorter time scales as more UK stocks are now above their 8 and 21 EMAs than below.

UK Indices Technicals for Week 13

Dollar and Commodities : Gold a GoGo Despite DXY Strength

In last week’s email I highlighted the bounce back in the dollar and questioned whether gold’s move to yet new all-time highs would continue under dollar strength. The technicals indicated that gold may indeed pull back. I also suggested that a challenge of that all time high was probably needed to maintain the overall momentum. This week, not only did the dollar continue to advance (+0.8%), but gold rallied and did indeed make new all-time highs adding 3.1% on the week closing at its high of $2233. This does look extremely bullish on the long-term trajectory of gold if indeed the decoupling from its inverse correlation to the dollar persists.

……What is then key in the next week is that the upward momentum continues and that we at least see a challenge of , if not a clearing of, the recent all time highs . If not there is a potential for a pullback in gold ……… WEEK 12 Wrap

This is likely giving us insights on the role of gold as an inflation hedge and safe haven against credit risk , it should prove very bullish for gold and precious metal miners.

The table below shows changes in prices of the composites for a number of the metals on the week . Copper pulled back to its 21 EMA and bounced on this maintaining its upward momentum. Silver did likewise and continues to significantly underperform gold. Platinum and palladium continue to base- looking increasingly likely to move north. Meanwhile iron ore made an attempt to rally but fell back 6% on the week to 7-month lows

Dollar Index Continues Rally above $104

Brent Crude Bounces off 21EMA , Maintains Bullish Bias

Brent oil sold off slightly on the EIA inventory data on Wednesday to touch the 21EMA around $84.9 did however rally from this and close the week out north of the $86 level. The chart above shows the rising channel in oil with the potential in the coming weeks to rally above $88 if momentum is maintained. This is in turn bullish the oil and gas names, suggestive of continued inflation and therefore I may impact travel leisure and retail.

Sectors This Week

Sector summary is show below 23 risers to 23 fallers with 1017 stocks rising to 652 fallings on the week . The green concentrated in Banks , Personal Care & Grocery, Retailers , Aerospace & Defence, Insurance while Food Producers and Beverages were also in green. 58 Oil & Gas names rallied to 43 fallers

UK Weekly Stock Heatmap

UK Weekly Sector Momentum

The sector momentum plot for the past week and month is shown below and highlights how Banks and Insurance with Aerospace & Defence continuing to outperform as they have year to date. Notable new entries are Retailers, Grocery, Food , Beverages and Renewable Energy names that are joining the party, with significant outperformance on results from the likes of ASOS (+12%) , JD Sports (+15%) , THG (+19%) on the week – see below. Retail and Renewables look set to continue with this positive momentum and offer good trading opportunities.