The markets continue to hint at making new record highs but so far have not been able to get it done. The S&P 500 (SPY ) is sitting about 1% away from hitting those highs but mixed earnings results continues to hold it back.
Semiconductors (SMH ) popped back to new highs already this week thanks to strong moves in China and trade optimism as Treasury Secretary, Steve Mnuchin says the trade deal is in its final stages. The sector got a strong boost late in the day thanks to a report that Qualcomm (QCOM ) and Apple (AAPL ) have settled their disputes and all pending litigation would cease. Qualcomm makes up about 5% of the SMH. Semiconductors, which are a major pillar of the S&P 500 are now higher by over 30% on the year and remain in a clean, steady uptrend.
The tech sector (XLK ) also has enjoyed a move back to highs and is one of just a few sectors in the S&P 500 that have moved back to record levels. Last week tech was one of three sectors that broke to record highs thanks to a consistent push by the bulls to move into large cap tech stocks. For the year the XLK is nearing 30% gains.
It's a big week for bank stocks (XLF ) which are slowly reporting their earnings for the first quarter. So far it has been a mixed bag with mostly beats on earnings but misses on revenue thanks to slowing areas of the sector. Wells Fargo (WFC ) has see the worst of it so far which includes downgrades from 4 different analysts on Monday alone. Technical traders note the continued hesitation of the XLF to move out of the sloppy range that has been an issue all year long.
REIT's (ICF ) have pulled back a little more sharply than previous weeks as interest rates have climbed off their lows. Many investors have been calling for a short term top in REIT's given it's sharp rally. REIT's were the first area of the markets to hit new highs which left many looking for a short term pullback to hop on.
Lastly, Healthcare (XLV ) continues to show weakness in the short term as Wall Street measures the likelihood of Presidential candidate, Bernie Sanders' "Medicare for all" push on the campaign trail. Tuesday was the worst day for the sector since December as investors move money to less uncertain areas of the market.