SMO Exclusive: SPDR Sector ETFs Strength Report Tuesday 2024-12-03 Weakened -0.3 to 4.0 Strength Score
Background
This analysis consists of the Stock Market Organizer stock-by-stock strength analysis applied to the 500 stocks that comprise the 11 SPDR Select ETFs.
These results are combined with overall market environment readings (via the Market Strength Score and the Sector Risk Gauge) to discern appropriate portfolio exposure given prevailing market and sector conditions.
Why do you care?
This dynamic market analysis provides a continuously updated, apples-to-apples comparison of the strengthening and weakening trends in the US market. By tracking the 500 large-cap stocks across 11 key sectors (via SPDR ETFs), this analysis offers valuable insights for investors seeking to harness momentum in their portfolios.
Each week, the analysis clearly identifies which sectors and stocks have gained, remained flat, or lost ground. With this data, investors can objectively assess sector and stock strength, refining their timing and positioning for new investments. Ultimately, this approach aims to enhance long-term portfolio performance by leveraging momentum – a proven market factor – to inform data-driven investment decisions.
Strengthening Status: Most Important Ranking
The following spectrum graph shows the ETFs based on their strengthening status, as compared to last week.
These are ordered based on whether or not and to where an ETF strengthened or weakened rating. These distinctions are important - that 1) a sector strengthened or weakened rating, and 2) from/to where this strengthening happened are key features to note.
Note that, unlike last week, for this week no ETFs strengthened enough to change rating but three weakened enough to do so. It is impossible to determine how long these signals will last - they could reverse at any time. However, the change in ratings is an objectively actionable signal.
Weekly Returns
Average Returns
Average returns graphs for the underlying stocks in each ETF are shown below (after the best and worst highlights):
Best:
- XLC/Communications, 1.3% average for 22 stocks
- XLY/Consumer Discretionary, 0.6% average for 51 stocks
- XLP/Consumer Staples, 0.4% average for 38 stocks
Worst:
- XLU/Utilities, -2.7% average for 31 stocks
- XLRE/Real Estate, -2.0% average for 31 stocks
- XLF/Financial, -1.3% average for 72 stocks
6 of 11 positive returns for the week, though the average returns of the two weakest sectors (XLU/Utilities and XLRE/Real Estate at -2.7% and -2.0%) outstripped to the downside the largest average positive return (XLC/Communications, +1.3%).
High and Low Returns
The following graphic overlays the lowest and highest returns in each sector.
The XLK/Technology outlier to the upside was SMCI/Super Micro Computer Inc +17% (a stock rated 7Weaker, up from 9Weakest and up dramatically at $40/share vs. its mid-November $18 bottom). The XLK/Technology outlier to the downside was DELL/Dell Technologies Inc -11% and rated 3Stronger.
Context: Comparison to Previous Weeks
The following graphics show recent week-to-week changes ending on Tuesdays:
- 11/19/24: Flat/Weakening
- 11/26/24: Strengthening
- 12/03/24: Weakening
Flat/slightly strengthening bias for the just-completed week ending Tuesday, 2024-12-03.
Current Status: 4.0 Composite Score, -0.3 this week
The following spectrum graph Strongest to Weakest shows the composition of the ETF ratings that comprise the current composite score, in order of Strength Rating. This is followed by a spectrum graph with the ETFs listed alphabetically.
The upper spectrum graph shows the ETFs in decreasing order of Strength Rating and strengthening for the week while the lower spectrum graph is alphabetical. In the upper graphic, sectors with the same rating are listed as follows: first, sectors that strengthened rating during the week; second, sectors with ratings that did not change during the week but did strengthen; third, sectors with ratings that did not change during the week but did weaken; and fourth, sectors which weakened rating during the week. The color-coded lines delineate different ratings - 4Strong or stronger are separated by green lines, 6Weak or weaker are separated by red lines, and 5Average is separated by black lines.
The ETFs are listed below based on their strength rating.
1Strongest
None
2VeryStrong
None
3Stronger
- XLC/Communications (Unchanged)
- XLI/Industrials (Unchanged)
- XLF/Financial (Weakened Rating)
4.0 - Composite Score
4Strong
- XLK/Technology (Weakened)
- XLRE/Real Estate (Weakened)
- XLY/Consumer Discretionary (Weakened)
- XLU/Utilities (Weakened Rating)
5Average
- XLB/Basic Materials (Unchanged)
- XLP/Consumer Staples (Unchanged)
- XLV/Healthcare (Unchanged)
- XLE/Energy (Weakened Rating)
6Weak
None
7Weaker
None
8VeryWeak
None
9Weakest
None
Today's Market Context
Key Headlines
"Stock Market Today: Big Tech stocks fuel S&P 500, Nasdaq to record highs"
"Trump’s election win fueled crypto XRP’s rally to a new high. Here’s why its gains may last."
"Trump’s economic plans may encounter a problem many Americans know all too well: Crushing debt"
"Why Trump’s tariff threats will hit stocks sooner than you think"
"Job openings rise and more workers quit in sign of improving U.S. labor market"
(Marketwatch)
"South Korea stocks down nearly 2% after President Yoon imposes and then lifts martial law"
"Traders brace for Friday’s jobs report, but Trump’s next move may matter more"
(CNBC)
Key Current Readings
SP500: 6,050
Nasdaq: 19,481
Nasdaq 100: 21,229
Russell 2000: 2,416
10Y Treasury: 4.234%
2YT: 4.183%
Oil (WTI Crude): $69.97
Bitcoin: $95,664
Dollar Index: 106.47
Gold: $2,661
VIX: 13.3
(CNBC)
Sector ETF Analysis Contents
The following Stock Market Organizer strengthening/weakening analysis looks at the 11 SPDR ETFs and their underlying component stocks for the week ending Tuesday 2024-12-03, as follows:
- ETFs Summary
1.1 Current Overview
1.2 Historical Summaries - ETFs Detail
2.1 XLB Materials
2.2 XLC Communications
2.3 XLE Energy
2.4 XLF Financials
2.5 XLI Industrials
2.6 XLK Technology
2.7 XLP Consumer Staples
2.8 XLRE Real Estate
2.9 XLU Utilities
2.10 XLV Health Care
2.11 XLY Consumer Discretionary - Stock Detail (downloads)
1. ETFs Summary
1.1 Current Overview
The following graphs reflect the composition of each of the ETFs based on their underlying stock strength ratings which range from 1Strongest to 9Weakest. Since I only care about the strongest and weakest in each sector, stocks rated from 2VeryStrong through 8VeryWeak are categorized as "Ignore."
- Top row: XLB/Basic Materials, XLE/Energy, and XLI/Industrials
- Second row: interest rate-sensitive ETFs XLF/Financials, XLRE/Real Estate, and XLU/Utilities
- Third row: XLK/Technology and XLC/Communications
- Bottom row: XLP/Consumer Staples, XLY/Consumer Discretionary, and XLV/Healthcare
The headers for each graphic are color-coded. ETFs rated 4Strong or better have green headings - currently, 7 of 11 ETFs qualify. The weakest ETFs XLB/Materials, XLP/Consumer Staples, and XLY/Healthcare have 5Average ratings - a reflection of overall market strength. ETFs that changed rating this week have thick green or red borders. ETFs that strengthened or weakened but did not change rating have thin green or red borders.
1.2 Historical Summaries
Below are 10-week historical strength rating summaries of the ETFs, sorted first by ETF and then by Week. The graphics make it easy to compare strengthening and weakening between ETFs over the most recent 10 weeks.
Sorted by ETF
This graphic shows the past 10 weeks strengthening and weakening segregated by ETF.
Sorted by Week
This graphic shows the past 10 weeks strengthening and weakening segregated by week.
2. ETFs Detail
Details for each of the 11 ETFs are provided below. Comments:
- The top section shows the strength rating of the sectors comprising each ETF, based on the eight original Stock Market Organizer classifications and NOT the 11 ETF classifications. For example, the XLB Basic Materials ETF consists of 19 Basic Materials stocks, 6 Consumer Goods stocks, and 2 Industrial Goods stocks.
- The middle section shows the previous 10 weeks' strengthening and weakening of the relevant sectors. For example, since the XLB has Basic Materials, Consumer Goods, and Industrial Goods stocks, these three sectors are shown in the middle section of the XLB detail. The XLF (Financial) has Financial, Services, and Tech stocks.
- The bottom section shows strengthening/weakening for the underlying ETF components stocks, and includes the listing of their Stock Market Organizer industries and sub-industries. These stocks are listed in order based on Sub-industry then strongest to weakest comparative stock strength rating. The Basic Materials XLB ETF includes both Newmont Corporation/NEM in the Gold sub-industry within the Metals & Mining industry and Dow Inc./DOW in the Specialty Chemicals sub-industry within the Chemicals industry.
In these bottom sections, one can visually see the strength/strengthening and weakness/weakening of the component stocks in each ETF.
2.1 XLB Materials (27 stocks, small), Unchanged at 5Avg = tied for WORST
2.2 XLC Communication Services (22 stocks, small), Unchanged at 3Stronger = tied for BEST
2.3 XLE Energy (22 stocks, small), WEAKENED RATING TO 5Avg = tied for WORST
2.4 XLF Financial (72 stocks, large), WEAKENED RATING TO 3Stronger = tied for BEST
2.5 XLI Industrial (76 stocks, large), Unchanged at 3Stronger = tied for BEST
2.6 XLK Technology (69 stocks, large), Weakened at 4Strong
2.7 XLP Consumer Staples (38 stocks, mid-sized), Unchanged at 5Avg = tied for WORST
2.8 XLRE Real Estate (31 stocks, small/mid-sized), Weakened at 4Strong
2.9 XLU Utilities (31 stocks, small/mid-sized), WEAKENED RATING TO 4Strong
2.10 XLV Health Care (61 stocks, large), Unchanged at 5Avg = tied for WORST
2.11 XLY Consumer Discretionary (51 stocks, mid-sized/large), Weakened at 4Strong
3. Stock Detail
The downloadable PDF below lists all component stocks in order of first Strongest to Weakest ETF and second Strongest to Weakest Stock. The difference between this report and the 11 ETF stock listings above is this report consolidates all component stocks whereas the above listings are segregated by ETF.
Download the following Excel file if you are interested in sorting results yourself.