Weekly Watch: Technology Rebounds as Gold and Silver Reverse

This Week’s Rotation

Technology rebounded over the past trading week while precious metals reversed sharply, with strength across the equity market remaining concentrated.

Equity Markets

The major U.S. equity indices produced mixed results.

The S&P 500 gained 0.34% and the Nasdaq 100 advanced 1.25%, while the Dow Jones Industrial Average declined 0.36%.

Those relatively small headline moves conceal considerably greater dispersion underneath the indices.

Sector Rotation

Technology was the strongest major equity sector tracked this week, gaining 3.25%. Energy also advanced 1.55%.

Most of the remaining equity groups moved lower.

Consumer Defensive declined 2.77%, Biotech fell 2.23%, Industrials lost 2.01%, and Consumer Cyclicals declined 1.41%.

Banks fell 1.29%, while Financials declined 0.73%. Airlines were particularly weak, losing 3.98%.

The contrast is important: the S&P 500 finished slightly higher, but strength wasn’t broadly distributed across the equity groups in Weekly Watch.

Commodities

Precious metals produced two of the week’s largest reversals.

Gold declined 5.01%, while Silver fell 3.42%.

That follows gains of 5.71% for Gold and 4.81% for Silver in the previous Weekly Watch, making the week-to-week change particularly pronounced.

Other commodities performed differently.

Natural Gas gained 2.51%, Oil rose 1.16%, and broad Commodities advanced 0.99%. Uranium was essentially unchanged at -0.07%.

The commodity complex therefore split between weakness in precious metals and gains across several energy-related markets.

Bonds & Currencies

Long-duration Treasuries declined 0.38%, reversing their gain in the previous Weekly Watch.

The U.S. Dollar strengthened 0.68%, while the Euro declined 0.52% and the Japanese Yen fell 0.49%.

The combination of a firmer dollar and weaker precious metals is one of the cross-asset relationships worth noting in this week’s data.

Intermarket Perspective

Two changes stand out.

First, Technology moved from a 5.35% decline in the previous Weekly Watch to a 3.25% gain over the past trading week.

Second, precious metals reversed in the opposite direction. Gold moved from +5.71% to -5.01%, while Silver shifted from +4.81% to -3.42%.

At the same time, the S&P 500 gained just 0.34%, while most of the equity groups tracked in Weekly Watch finished lower.

The result was not broad equity strength. Technology and Energy provided positive sector leadership while weakness remained widespread elsewhere, and precious metals gave back much of their prior advance.

What I’ll Be Watching Next

Technology is the first area to watch. Its move from the weakest major sector in the previous Weekly Watch to the strongest in the current snapshot represents a substantial reversal.

I’ll also be watching precious metals after their similarly sharp move in the opposite direction.

Energy deserves attention as well. Both the Energy sector and oil finished higher, while Natural Gas gained 2.51%.

Finally, the breadth of equity participation remains important. If the S&P 500 continues higher, whether more sectors begin participating alongside Technology would tell us more than the index level alone.

Educational only. Not investment advice.