The North American Insurance Composite marshalled by Stonybrook Capital and Weild & Co. was up 2.1% for the week of Feb 9th-16th, “likely setting a record-high weekly close”, with most issues having eclipsed their previous records.
The Composite also reportedly beat all major indices for both the week and year to date (up 9.1% YTD).
According to Stonybrook’s commentary on the figures, advancers beat decliners by 79 to 33, with nine of the eleven industry groups advanced.
The two best-performing groups were Coastal Insurers at +8.0% and Specialty Commercial Insurers at +5.3%.
Meanwhile, the two worst-performing groups were Insurance Services Providers at -1.2% and Micro Cap Insurers at -1.0%.
Stonybrook also revealed that large cap indices were all down in the face of a negative surprise in inflation numbers.
The Dow Jones Industrial Average was seemingly down 0.1% on the week (+2.5% YTD), the S&P 500 was down 0.4% (+4.9% YTD) and the NASDAQ 100 was down 1.5% (+5.1% YTD).
However, the Russell 2000 Small Cap Index was up 1.1%, placing it into positive territory for the year (+0.3% YTD).
“We believe this was the result of some repositioning of portfolios as managers captured tech gains and bought lower multiple stocks,” Stonybrook explained.
Elsewhere, the firm disclosed that the January CPI and PPI data was “disappointing”, highlighting in its commentary that CPI came in at 3.1% vs. last year, which was above the consensus of 2.9%.
Core inflation (excluding food and energy) at 3.9% was also higher than the consensus of 3.7%, which ostensibly triggered the sell-off in larger cap stocks.
“However, we have observed a recent pattern of downward revisions in inflation numbers. So, we suspect that when the final inflation numbers are announced they may be a touch better than those reported this week,” Stonybrook noted.
The firm went on, “In addition, there can be seasonality to January inflation numbers: The so-called “January Effect” where businesses close out the prior calendar year and raise their prices in January.”
