Key Insights
Three-section weekly brief from the latest LLM run. Each card cites specific numbers from the universe scoring data; the pipeline regenerates this after every grade snapshot.
TRANSITIONAL. The market exhibits short-term positive momentum with the universe-wide Q3M score improving by +1.84 over Q12M, but underlying long-term quality erosion remains a concern.
Market breadth remains healthy with 60.4% of equities having their 30d SMA above their 100d SMA. The universe-wide Quant Score 3M of +2.51 significantly surpasses the 12M score of +0.67, indicating a +1.84 improvement in short-term alpha generation.
While the percentage of A+B graded names saw a slight +0.3pp improvement to 31.7% in the latest period, the longer-term trend shows a significant -18.9pp decline over 12 snapshots from 50.6%, highlighting persistent quality erosion.
Energy leads with 63.9% A+B names, while Financials and Health Care show strong acceleration with Q3M-Q12M improvements of +6.47 and +5.96 respectively. Conversely, Utilities lags significantly with only 8.3% A+B names and a -4.72 deceleration in Q3M vs Q12M.
| Symbol | Sector | Grade | Return | Weight | Impact▼ |
|---|---|---|---|---|---|
| MSFT | Information Technology | B | +20.0% | 3.21% | +0.64% |
| NVDA | Information Technology | B | +6.8% | 4.81% | +0.32% |
| AAPL | Information Technology | B | +6.7% | 4.19% | +0.28% |
| AMZN | Consumer Discretionary | C | +5.0% | 2.50% | +0.12% |
| PLTR | Information Technology | B | +26.7% | 0.38% | +0.10% |
| JNJ | Health Care | B | +15.7% | 0.60% | +0.09% |
| CRM | Information Technology | B | +47.2% | 0.19% | +0.09% |
| PANW | Information Technology | B | +30.6% | 0.28% | +0.09% |
| MRK | Health Care | B | +25.8% | 0.33% | +0.09% |
| DELL | Information Technology | A | +26.0% | 0.30% | +0.08% |
| JPM | Financials | B | +8.0% | 0.86% | +0.07% |
| SAP | Information Technology | C | +27.2% | 0.22% | +0.06% |
| MA | Financials | B | +13.5% | 0.45% | +0.06% |
| SAPGF | Information Technology | C | +27.1% | 0.22% | +0.06% |
| TMO | Health Care | B | +28.4% | 0.21% | +0.06% |
- CANADA134
- BRITAIN66
- JAPAN64
- CHINA62
- ISRAEL35
The Energy sector continues to demonstrate strong conviction, with 63.9% of its 191 names holding A+B grades and a robust Q12M score of +6.74. Eight of the top ten Long Book names are Energy, including MPC and VLO, which show exceptional Q3M scores of +29.2 and +27.6 respectively.
Financials and Health Care are key drivers of recent market momentum, with Financials' Q3M score improving by +6.47 over Q12M and Health Care's by +5.96. Both sectors also boast strong MA breadth at 75.7% and 76.2% respectively.
Information Technology is experiencing a notable deceleration, with its Q3M score at -0.98, a -1.65 decline from its Q12M score of +0.67. The sector's MA breadth is also weak at 48.5%, and the only IT name in the Long Book, MU, is decelerating with Q3M of +3.0 compared to Q12M of +14.4.
Utilities and Real Estate sectors are exhibiting significant weakness, with Utilities having the lowest A+B conviction at 8.3% and Real Estate at 19.5%. Utilities also shows a sharp Q3M deceleration of -4.72 from its Q12M score, and its MA breadth is only 25.0%.
The Short Book is concentrated in Communication Services (3 names), Consumer Discretionary (2 names), and Industrials (2 names). Top shorts like MNSO and BTM maintain strong negative Q12M scores of -16.9 and -16.9 respectively, indicating persistent underperformance.
The long-term trend of A+B graded names shows a substantial -18.9pp decline over 12 snapshots, from 50.6% to 31.7%, indicating a significant erosion in overall market quality.
MU, a name in the Long Book, is showing a deceleration in momentum with its Q3M score at +3.0, a significant drop from its Q12M score of +14.4, suggesting a potential reversal.
Information Technology and Communication Services sectors exhibit weak breadth, with 30d SMA > 100d SMA percentages at 48.5% and 49.1% respectively, falling below the healthy 60% threshold.
The Utilities sector is in critical condition with only 8.3% A+B names, an MA breadth of 25.0%, and a severe Q3M deceleration of -4.72 from its Q12M score, making it the weakest sector by multiple metrics.