2023-06: Financials Sector and Microsoft MSFT as driver for US broad equity
As of Tue 20 Jun close, according to tsterm, using 2-day ahead horizon,
The common causally predictive factors behind US 5-, 10-, 20-, 30-Year Real Interest Rates DFII5, DFII10, DFII20, DFII30 are
Seattle Genetics SGEN (biopharmaceutical)
Paypal PYPL (technology, payment service)
Ross Stores ROST (consumer, discount stores)
Take Paypal PYPL for example, over long term its stock price was hump-shaped and peaked in July 2021. If we zoom in, over last month it re-floated up.
One can search for “DFII5; DFII10; DFII20; DFII30” to see the results. At the moment, all four interest rate forecasts are only moderately bullish.
As a reminder, Real Interest Rate = Nominal Interest Rate - Market-Implied Inflation Rate.
The common causally predictive factors behind US Equity Index ETFs QQQ, SPY, DIA are
Financials Sector SPDR ETF XLF (US financials sector)
Microsoft MSFT (technology)
SPDR S&P Midcap 400 ETF Trust (US mid-cap)
US Dollar to Canadian Dollar Exchange Rate USDCAD (currency)
Within US financial sector, the insurance companies should be doing well on high interest rates as they generally hold bonds as assets. Several banks collapsed months ago and the Federal Reserve has been offering some support.
Microsoft is enjoying stellar stock price performance over the past decade, recently booming thanks to the cloud service and highly-demanded AI business.
One can search for “QQQ.US; SPY.US; DIA.US” to see the results.