Energy Jumps, Consumer Discretionary Falls, Large Cap Sectors out of Favor

by: MyPlanIQ

Last week, the top three sectors dropped. This week, the top sectors increase, with the notable exception of Consumer Discretionary that drops out of the top three.

Sectors in the bottom half of the table all experienced downward pressure after some relief last week. This is a return to the trend that has been prevalent for some time.

Assets Class Symbols 01/28
Energy XLE 18.35% 15.94% ^
Industries XLI 13.61% 13.38% ^
Materials XLB 11.99% 9.59% ^
Technology XLK 10.54% 8.83% ^
Consumer Discretionary XLY 10.42% 12.39% v
Telecom IYZ 9.27% 7.62% ^
Financial XLF 7.75% 9.1% v
Consumer Staples XLP 4.21% 5.85% v
Utilities XLU 3.66% 4.37% v
Healthcare XLV 3.19% 4.81% v
Click to enlarge

The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).

With the current trouble in Egypt, fears of spreading Middle East unrest, particularly around major transit points, drove oil futures up. At the same time, we continue to see bad weather on the east coast increasing demand.

Industrials increased a little based on the continuing expectation of increasing demand for goods although the Department of Commerce recently reported durable goods dropped unexpectedly in December giving some investors pause.

Materials also increased as mining and metals appear solid in the face of strong demand. However, a lot of this has been priced in and there is some concern that the emerging nations who consume these metals could be due for a correction, which would negatively affect this sector. For now, it is performing well.

Despite solid earnings from Abbott Labs (NYSE:ABT) and St. Jude Medical (NYSE:STJ), the sector still continues to drop as concerns about healthcare and costs persist.

Utilities also continue to drop as small and medium cap stocks are showing higher returns. The underlying potential remains but it seems that this sector is out of favor.

Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up investment plans. The performance data of portfolios mentioned above are obtained through historical simulation. I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.