When it comes to dividends, the US may not be the best country for investors to look for a higher yield.  US equities currently have a dividend yield of only 1.98%, well below the average of 3.51% for the 22 other major global economies that we track in our Global Macro Dashboard. The only country with a lower dividend yield is India with a 1.21% yield.  A potential reason for this comparatively low yield in these two countries is simply higher equity prices.  India runs away with the highest valuation of their equities with a P/E of 28.56; the highest among the 23 countries in our Global Macro Dashboard. The US similarly is not cheap relative to the rest of the world as it possesses the fourth highest valuation of 18.33x earnings. That compares to a world average of only 15.72.

Over the past month, the yield on the 10 Year US Treasury Note fell considerably from over 2.5% at the beginning of May to 2.13% today. Unlike the dividend yield, the 10 year still holds up better than most of the world.  The US has a higher yield than the comparable security for 14 other countries. Even with the yield coming down recently, it is still far more attractive than the negative yields on Japanese, German, and Swiss 10-years.

One more interesting dynamic of the US compared to the rest of the world is the very tight spread between the dividend yield and the 10 year.  Currently, the dividend yield is only 15 bps lower than the 10-year yield for the US.  Nine other countries similarly have a higher yield in their 10-year note. With such a low yield on dividends, India has the widest spread in favor of the country’s government debt, while on the other end of the spectrum, Sweden has the widest spread in favor of dividends. Start a two-week free trial to Bespoke Institutional to access our Global Macro Dashboard and much more.

The next couple of days could prove to be very important for the semis.  After falling just shy of 20% from its intraday high in mid-April to its intraday low at the end of May, the Philadelphia Semiconductor Index (SOX) rallied over 10% to yesterday’s intraday high before pulling back into the close.  The fact that the SOX pulled back where it did is notable because it came right as the index had retraced 50% of the decline from the April highs.  As shown in the chart below, the mid-point between April’s high and May’s low was 1,445.78, and yesterday’s high was less than five points lower at 1,440.8.  Semis opened lower again this morning, so the longer the weakness persists, the more it will look like a failed rally.  But if the group bounces from here or even marks time near current levels and then bounces, it would send a positive signal for the group and broader tech in general.

Using our Custom Portfolio tool that’s available to subscribers, we created the custom portfolio below of large-cap stocks in the SOX index to show where each semiconductor name stands relative to its normal trading range.  If you’re a Bespoke Premium or Bespoke Institutional member, you can track this group going forward by clicking here to add it as a new custom portfolio.  For each stock listed, we show the most recent closing price, how the stock has performed YTD and over the last five trading days, and where the stock is trading relative to its 50-DMA.  On the right side of the table, we also include our proprietary Trend and Timing Scores along with where each stock is with respect to its trading range.

Looking through the list, the majority of stocks are up over 4% in the last week, so they’ve definitely had a nice few days.  Despite the gains, though, just two stocks listed are trading at overbought levels, and only four are above their 50-DMA.  Given they aren’t even close to overbought, the group clearly has more room to run.  At the same time, though, if the rally fails to hold before the majority of members could even get back above their 50-DMAs, that wouldn’t say much for the group’s prospects.  To use our Custom Portfolio and Trend Analyzer tools, start a two-week free trial to Bespoke Premium.

Even with declines yesterday, most of the major index ETFs have managed to hold above their 50-DMAs. Six of the fourteen currently sit under this moving average including the Nasdaq (QQQ), Russell 2000 (IWM), and Micro-Cap (IWC).  This comes despite QQQ having the largest gains over the past week (4.85%) while IWC actually has seen the worst performance as the only one of these ETFs to sit in the red. Additionally, IWC is the only major index ETF that is oversold. Perhaps not to the same degree, but this weakness is being shared with other small caps as IWM and the Core S&P Small-Cap ETF (IJR) are teetering on oversold levels and both have seen less than a 1% gain over the past five sessions.

Moving over to the individual sectors, defensives remain broadly overbought with Consumer Staples (XLP) and Real Estate (XLRE) sitting at extreme levels even as they have not necessarily been the best performing sectors in the past week.  XLP has been strong with the third best gains of all eleven sectors, but XLRE’s performance has been more middling and Utilities (XLU) has actually moved the least in the past week.  Meanwhile, Technology (XLK) has rocketed out of oversold territory, rising 5.45%.  While the move hasn’t been as rapid, Health Care (XLV), a sector which we have repeatedly highlighted the underperformance of this year, has begun to press higher.  XLV has just entered overbought territory and is at an interesting spot from a technical perspective.

In the past several weeks, XLV has made a few higher lows and more recently has begun to break out to the upside. XLV has moved above both its moving averages as well as its downtrend line originating in the fall of last year, although this week it has paused at resistance from early April.  While the past few days’ price action seems like the sector can move lower again, possibly retesting support at the 200-DMA and a recent high around $90, this sort of breakout can be a promising sign for the future of this year’s worst sector. Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer and much more.