U.S. Sectors Up on Economic Hopes
12/11/2010 0 comments
U.S. sectors provide insight into the parts of the US economy that are flourishing or floundering. It plays an important role in asset allocation strategy such as MyPlanIQ Tactical Asset Allocation. MyPlanIQ tracks detailed weekly U.S. sectors trend movements. We use ETFs that represent each sector and present the results here. More details can be found in MyPlanIQ 360 Degree Market View.
|
Asset Class |
Symbols |
12/08 |
12/01 |
Direction |
|
Energy |
(XLE) |
15.39% |
13.95% |
^ |
|
Consumer Discretionary |
(XLY) |
14.38% |
12.9% |
^ |
|
Industrials |
(XLI) |
13.36% |
11.29% |
^ |
|
Materials |
(XLB) |
12.73% |
10.52% |
^ |
|
Technology |
(XLK) |
10.47% |
7.77% |
^ |
|
Telecom |
(IYZ) |
9.55% |
7.74% |
^ |
|
Financial |
(XLF) |
6.34% |
1.32% |
^ |
|
Consumer Staples |
(XLP) |
6.33% |
5.05% |
^ |
|
Healthcare |
(XLV) |
3.84% |
2.96% |
^ |
|
Utilities |
(XLU) |
2.05% |
2.71% |
v |
Top Three Indicators
U.S. sectors rallied in the week ended on 12/8, helped by a stream of positive economic news.
The Consumer Select Sector SPDR Fund (XLY) should be a barometer of the strength of U.S. consumer throughout the holiday season. Thanks to encouraging reads on consumer spending in the holiday shopping season, sentiment on the retail sector has been bullish recently. The extension of the Bush-era tax cut is expected to add to the positive tone in the retail markets and companies with exposure to consumers stand to benefit. Against this favorable backdrop, (XLY) makes an attractive momentum play.
Energy Sector SPDR Fund (XLE) topped our table with the highest trend score of 15.39%. The ETF benefited from a sharp fall in U.S. energy inventories which pushed oil prices higher and a pick-up in demand for oil across the globe as economic activity increases. Outlook remains positive - oil prices to break the psychologically important level of 90 dollars per barrel is expected by the end of 2010. With huge buying in the oil sector, (XLE) appears ready to rise higher.
Bottom Three Indicators
Government data show spending on health care continuing to rise and the healthcare sector also benefited from the better market environment. (XLV) rose in the week ended on 12/8 with a modest weekly gain of 0.29%. Upward momentum could continue in the healthcare sector as it becomes a focus for buyout activities with the increasing numbers of deals announced lately.
The utilities sector was the only sector to end in red. Utilities Select Sector SPDR Fund (XLU) registered a weekly loss of 0.75%, continuing its recent downward trend. As we get more news pointing to an uptick in economic data and economic recovery to gain steam in 2011, defensive stalwarts such as the utilities sector might underperform and lag behind sectors such as consumer discretionary (XLY) and materials (XLB) that have traditionally done well during the upswing of the economic cycle.
labels:investment,
Symbols:XLY,IYZ,XLI,XLB,XLK,XLE,XLF,XLP,XLU,XLV,SPY,QQQQ,IWM,MDY,EFA,VEU,EEM,VWO,IYR,ICF,VNQ,GSG,DBC,DBA,USO,LQD,CSJ,CIU,HYG,JNK,PHB,TLT,IEF,SHY,SHV,BND,AGG,MUB,MBB,
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