Weekly Watch: Technology Rebounds as Metals and Uranium Lead

This Week’s Rotation

Technology returned to leadership, while metals, uranium and biotech posted some of the strongest gains across the markets tracked in Weekly Watch.

Equity Markets

The major U.S. equity indices all advanced over the past trading week.

The S&P 500 gained 2.14%, the Nasdaq 100 rose 3.25%, and the Dow Jones Industrial Average advanced 1.47%.

The Nasdaq’s outperformance coincided with a strong rebound in technology. Technology (XLK) gained 5.48%, making it one of the strongest equity groups in this week’s table.

Sector Rotation

Technology’s return to strength was the clearest sector development, but gains weren’t limited to technology.

Biotech (XBI) rose 6.85%, while Industrials (XLI) gained 1.19%, Consumer Cyclicals (XLY) 0.91%, Financials (XLF) 0.77%, and Energy (XLE) 0.56%.

There were still pockets of weakness. Airlines (JETS) declined 2.62%, Banks (KBE) fell 0.67%, and Consumer Defensive (XLP) slipped 0.34%.

That leaves a more specific picture than simply calling the week broadly positive: technology and biotech led, while several other equity groups posted smaller gains and airlines and banks lagged.

Commodities

Some of the week’s largest moves occurred in metals and uranium.

Silver (SLV) gained 11.00%, Uranium (URA) advanced 9.75%, and Gold (GLD) rose 7.07%.

Broad Commodities (DBC) gained 2.44%, while Oil (USO) and Natural Gas (UNG) rose 0.90% and 0.99%, respectively.

The contrast with the previous week is notable. Gold and silver had both declined in the August 3 snapshot; this week they moved sharply higher.

Bonds & Currencies

Long-duration Treasuries were essentially unchanged, with TLT gaining just 0.10%.

The U.S. Dollar (UUP) declined 0.16%, while the Euro (FXE) gained 0.37%.

The Japanese Yen (FXY) moved in the opposite direction, falling 1.29%.

Currency movements were therefore relatively contained compared with the much larger moves occurring in technology, biotech, metals and uranium.

Intermarket Perspective

The main change over the past trading week was the return of technology leadership alongside substantial strength in metals and uranium.

That combination is more informative than the gains in the major indices alone.

The Nasdaq outperformed the S&P 500 and Dow as technology strengthened, while gold, silver and uranium simultaneously posted some of the largest gains in the Weekly Watch universe.

Rather than assigning a broad label to the market, the data point to several distinct areas of leadership: technology, biotech, precious metals and uranium.

What I’ll Be Watching Next Week

Whether technology can maintain its renewed relative strength will be one of the more important developments to follow.

I’ll also be watching whether the sharp advances in gold, silver and uranium extend into another week, and whether strength begins to spread further into areas that lagged this week, particularly banks and airlines.

Educational only. Not investment advice.