Sector Buy/Sell Signals - Week of February 3, 2020

David Dierking

Last week, we got a fairly good slate of earnings reports overall, although names, such as Facebook and AMD, gave some reasons for concern. But the markets have mostly been worried about how the coronavirus could impact the worldwide economy more than anything else.

The S&P 500 now sits more than 3% below its all-time high, the lowest it's been since October, but international equities have been the real laggards. Emerging markets, thanks to China's sharp correction, have led the way down, but weakness has spread into European and other Asian equities as well. I still believe that China is a buy the dip opportunity, but there will obviously be a lot of volatility along the way. Investors looking to take some risk off the table here might want to steer clear.

The volatility, however, has been bullish for Treasuries. After struggling for the past month or two, long-term T-bonds have posted gains of 4-5% in just two weeks. Treasuries have been the safe haven asset of choice during the pullback as the dollar index remains mixed and gold still struggles for direction.

Precious metals are still a buy overall with particular strength being demonstrated by palladium. Copper and oil, two commodities with deep ties to the Chinese economy, have been plunging. Copper prices were down for 12 straight sessions, while crude oil prices have descended into bear market territory.

Here is the full scorecard for the week ahead.

ETF Sector Scorecard - Scorecard-22-page-001
ETF Sector Scorecard - Scorecard2-19-page-001
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Weekly Buy/Sell Signals

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