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Following the Federal Open Markets Committee (FOMC) meeting last week, US rates sold off in the front end and the Treasury curve flattened, while US equity markets have been mired in a sideways trend. The below matrix perfectly illustrates the nature of the change in fortunes for global equity markets since the Fed meeting: US equities slightly down, foreign markets up, and US rates markets rallying in the long end.

The worst performing US equity family this past week has been the Russell 2000. Small caps have been roughed up consistently over the last week and a half, while Nasdaq 100 stocks have also had a rough go. US large caps have been surprisingly resilient led by Energy and Utilities stocks, while the worst performers have been the Consumer Discretionary and Financials sectors.

In global markets, every major country ETF we track outperformed the US this past week, led higher by Brazil, China and India as EM markets have come roaring back. Commodities have also outperformed, with the exception of precious metals.

This picture gives a pretty strong endorsement to the view that the FOMC meeting last week has put an end to trends we have seen in place since the start of the year. The question is, are we seeing a repricing or the beginning of a new downward trend in US equities?

Source: ETF Performance Matrix: Post Fed, Rotation Out Of U.S.