Top Stock Sector ETFs for January 2019
The stock market has begun to recover some of the losses suffered during a turbulent fourth quarter of 2018 and December’s disastrous plunge. It’s unknown whether this recovery will continue, as volatility remains elevated and there are many catalysts for another potential leg down. However, we saw a tentative bottom at the market close on December 24, 2018, and we’re hoping the worst of it is now behind us. January of 2019 has been mostly bullish so far, but some market sectors have done better than others. As of the market close on Tuesday, 1/8/2019, all major sectors are positive when measured from the late December lows. Here, we present the strongest of those sectors in this January 2019 edition of our Top Stock Sector ETFs.
The Sector ETFs
Here are the major sector ETFs – all SPDRs – that we looked at (in descending order of performance from the December 24, 2018 market close to the January 8, 2019 market close):
- XLE: SPDR Energy Sector +13.76%
- XLY: SPDR Consumer Discretionary Sector +13.33%
- XLC: SPDR Communication Services Sector +13.16%
- XLI: SPDR Industrial Sector +10.36%
- XLB: SPDR Materials Sector +9.78%
- XLF: SPDR Financials Sector +8.95%
- XLK: SPDR Technology Sector +8.68%
- XLV: SPDR Health Care Sector +7.89%
- XLP: SPDR Consumer Staples Sector +6.08$
- XLRE: SPDR Real Estate Sector +5.84%
- XLU: SPDR Utilities Sector +2.97%
Clearly, the most impressive returns during this slightly more than two weeks have been from the energy sector (XLE), consumer discretionary (XLY), and communication services (XLC), all at over 13% returns since late December.
A few key observations here:
- The energy sector (XLE) is bouncing back significantly as crude oil has begun to recover after an extended period of plunging oil prices in late 2018.
- Utilities showed consistent strengthening throughout much of 2018 until mid-December. But now, as the overall market gains back some footing, the utilities sector has fallen relatively out of favor and is the least impressive performer on the list.
- Both consumer discretionary (XLY) and communication services (XLC) were on clear downtrends for the latter half of 2018, but are now both among the sector leaders in the current (tentative) market recovery.
- And as for the closely-watched tech and financial sectors? Both also took major nosedives in the second half of last year. They’re now in the middle of the sector pack since the December lows but could move higher or lower very soon as earnings season kicks in once again. (See our Market Events & Earnings Calendar)
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Past performance is not indicative of future results. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.
Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.
Senior Technical Analyst at The Technicals
As a momentum stock trader, Luke focuses mostly on strong market moves. Luke has been trading the markets since the early 2000s, but still gets excited by big movers. Whether a surging large-cap tech company or meteoric penny stock, Luke tracks and trades winners. A technical analysis purist, Luke authors many of our Top Stocks & ETFs reports. Contact Luke