By Jim Dondero | July 20, 2015
- Stocks were smartly higher last week with both the tech and financial sectors demonstrating strong leadership. The NASDAQ-100 Index for example, clearly broke out of its recent range and showed nice upticks in both momentum and the number of new 52-week highs. Additionally, growth stocks appear poised to extend their outperformance over value stocks should the market advance continue.
- Overseas, developed markets also showed signs of renewed strength with both indices in Germany and Japan surging off their 200-day moving averages. Emerging markets on the other hand continued to struggle, with India the only BRIC able to demonstrate incremental improvement over the week prior. Brazil and Russia remain in what appear to be longer term downtrends.
- The US dollar also continue to reassert its uptrend last week, while commodity subsectors remained in their downtrends. New last week was that commodity-sensitive currencies such as the Canadian and Australian dollars broke through support, adding fresh evidence to the theme of deflation which has been prevalent throughout 2015.
- Finally, bonds remained largely unchanged from the week prior as yields continued to struggle at important areas of resistance. While China may well be a strong influence on yields, bonds remain decisively ambiguous here, and it is unclear whether rates are on the verge of a meaningful advance or intend to fall harmlessly into a large trading range.