By J.C. Parets & All Star Charts
Friday, 31st March, 2023
1/ Second Straight Quarterly Gain for Stocks
2/ Growth Sectors Shine
3/ Seasonal Tailwinds Kick In for Commodities
4/ Cattle Futures Move Onward and Upward
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1/ Second Straight Quarterly Gain for Stocks
With March now behind us, another quarter is in the books. While it may not have felt like it, U.S. and international stocks just posted their second consecutive quarter of gains.
Stocks all around the world have been moving steadily higher since the lows from last fall. Here is a long-term quarterly candlestick chart of the S&P 500:
The first three quarters of 2022 were negative, representing the longest streak of quarterly losses since the global financial crisis in 2008 and 2009. However, the selling pressure could be behind us for now, as bulls have been back in control since late last year.
With stocks entering a seasonally strong period, more gains could be in store.
2/ Growth Sectors Shine
While the major stock market averages rose during the first quarter, performance by sector varied widely. Growth sectors clearly outperformed, while value stocks and defensive sectors struggled.
The chart below depicts the quarterly performance of the large-cap sector SPDR ETFs:
As you can see, the technology (XLK), communication services (XLC), and consumer discretionary (XLY) sectors rose 21%, 20.5%, and 15.5%, respectively. At the same time, many of their peers have lagged, with cyclical sectors such as energy (XLE) and financials (XLF) rounding out the list of worst-performing sectors.
Growth stocks are back in a leadership role, at least for the short and intermediate term.
3/ Seasonal Tailwinds Kick In for Commodities
Seasonal tailwinds are picking up for the commodity space.
Over the past 60 years, April has been the strongest month of the year for commodities from the perspective of seasonality.
Here is a commodity seasonality chart created using the Bloomberg Commodity Index (BCOM):
Since 1961, April has outperformed any other month by almost a full percentage point with respect to commodity price gains. That’s a significant data point from a performance perspective.
4/ Cattle Futures Move Onward and Upward
The agricultural futures markets are starting to heat up.
A chart of feeder cattle futures presents an excellent example of the uptrends underway across the lesser-known agricultural contracts:
Feeder cattle futures are printing fresh seven-year highs, while May sugar futures are posting new contract highs today. Meanwhile, silver is staging a comeback as it challenges its year-to-date highs.
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Originally posted 31st March, 2023
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