Heading into today’s open, the Nasdaq Composite (QQQ) closed at $731.07, down -0.32%. The S&P 500 (SPY) finished at $776.34, a decline of -0.28%, coinciding with a slight easing in volatility as the VIX sits at 14.94. Concerns around persistent inflation – evidenced by the 10-Year Treasury Yield holding firm at 4.70% – are driving defensive positioning.
This week we’re leaning into Gold (GLD) and Energy (XLE). Gold is showing strong momentum, posting a +9.0% gain over the last month and trading above its 50-day trend; it benefits from safe haven demand given yield levels. We also favor Energy (XLE), with +7.3% one-month momentum also exceeding its 50-day trend, supported by macro factors. These sectors offer a blend of cyclical upside and defensive characteristics in the current environment.
Last week delivered strong performance across our prior picks. Energy (XLE) led with a +6.09% return, followed closely by Financials (XLF) at +5.66%. Gold (GLD), while positive, lagged with a +1.04% gain – suggesting some profit taking after its recent run.
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