|Day's Range||1.7700 - 1.7700|
The Health Care Select Sector SPDR ETF (XLV) , the largest ETF dedicated to the sector, is up just 6% this year, putting it well behind the S&P 500 and other sector funds, but after lagging the broader market for more than eight months, healthcare stocks could be on the mend. Deutsche Bank analyst George Hill said many healthcare stocks are “Range-bound given the overhang of the 2020 election [as] investors fear the bogeyman of healthcare reform will finally emerge from the Washington DC cellar,” reports Teresa Rivas for Barron's. Previously, investors embraced healthcare stocks for the sector’s growth and defensive characteristics, providing investors with yields and valuations that are less stretched than other yield-producing stocks like utilities.
Declining interest rates and increasing speculation that the economy is slowing are among the factors pressuring financial services exchange traded funds. While the S&P 500's third-largest sector weight is scuffling, some analysts believe there is upside to be had with the financial services sector, a group almost universally viewed as a value destination. In a note out Tuesday, AltaVista Research tagged XLF with an Overweight rating.
Institutional investors and hedge funds have shifted away from technology names as the U.S.-China trade war extends and picked up battered healthcare names. Retail investors can also gain exposure to the ...
Inverted yield curve is not as scary as it seems to be. Wall Street staged a rally on many such occasions. So, investors can easily bet on these top-ranked ETFs.
In the movie “Top Gun,” Maverick, the hotshot pilot played by Tom Cruise, said of aerial dogfighting, “You don’t have time to think up there. If you think, you’re dead.” Well, investors don’t have to make ...
The stock market worked off a midday slump but still closed with losses, after a wild week that saw the main indexes come back from steep declines.
The last time I reviewed the Sector SPDR ETFs, I said that the rally was coming to an end and it certainly looks like it could be. Why did I make this prediction? I'm not psychic, it wasn't a guess, and I really couldn't care less about the Federal Reserve or trade wars. I thought that the rally was ending because various sector SPDR ETFs were running into resistance and the consumer discretionary sector was due for a pullback because Amazon (NASDAQ:AMZN) was overbought.As someone who traded at various hedge funds over the past 20 years, I can tell you with 100% certainty that the vast majority of moves made by the S&P 500 Index SPDR (NYSE:SPY) have nothing to due with what the so-called experts in the financial media are attributing to.In financial markets, there are certain price levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, prices are always doing one of 3 things. Going up, going down, or staying the same.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMost moves in the SPYs are caused by the reaction the underlying sectors that make up the S&P 500 make when they get to these levels or the trend changes. For example, if a sector gets to important support while being oversold, it tends to rebound. If it is not oversold, it tends to consolidate and break the level. It has nothing to do with what Jim Cramer is screaming about or what the analysts are saying. * 10 Cyclical Stocks to Buy (or Sell) Now If you want to get insight into the S&P 500 or SPY, you should look at how the various acting. For example, technology led most of the recent rally -- until the end when the consumer discretionary became more important. Different things drive and influence the market at different times.Let's look at some of the sectors to gain some insight into the future direction of the SPY. Financial Sector SPDR (XLF)The Financial Sector SPDR (NYSEARCA:XLF) has broken support at the important $28 level. This level is important because it was support through all of July, after being a resistance level in May.This will probably be the most important sector to watch over the next week or so. If the XLF fail to rebound back above this level it will be a signal that the SPY are going to trend lower.If the XLF continue to head lower, there may be some support around the $26 level. This is because this is where the lows were at the very end of May. Consumer Discretionary Sector SPDR (XLY)The Consumer Discretionary Sector SPDR (NYSEARCA:XLY) has also broken important support. The $121 level was resistance in April and June.One of the things that led the recent rally was the buying of AMZN stock. Amazon is about 20% of this sector, and as I mentioned last time, AMZN stock was the most overbought that it had been in two years. This brought sellers into the market and this made the stock, and the XLYs, go lower. * 10 Stocks to Buy on the Trade War Dip The dynamic here is similar to that of the XLF. If the XLY does not quickly rebound back over the $121 level, it will be another signal that the SPY is going to trend lower. Technology Sector SPDRs (XLK)The Technology Sector SPDR (NYSEARCA:XLK) has also broken its uptrend. If it continues to sell off, there will probably be some short-term support around $79. This is because this level was resistance in April and June. If it breaks, the broader markets will drop because the tech sector is the biggest part of the S&P 500.How does a resistance level become a support level? The investors who sold their stock at $79 thought they made the correct decision to sell when it traded lower. The short-sellers were looking at a profit.Then when it rallied through the $79 level, the sellers think they have made a mistake and decide to buy XLK if it gets back to $79. The short-sellers tell themselves that if they can cover and break even, they will. Those who bought it at $79 believe they made a good decision and tell themselves that they will add to their positions at $79 if they can.Added to this are the professional traders seeking to profit off of a clear level you can see that there are four groups who want to buy XLK at $79. This demand creates a support level. Healthcare Sector SPDR (XLV)The Healthcare Sector SPDR (NYSEARCA:XLV) has been trending lower over the past month. There will probably be some support around the $90 level because it was resistance in May. * 8 of the Most Shorted Stocks in the Markets Right Now If the XLV finds support around $90 and breaks the downtrend, it could stabilize the SPY. The reaction that the XLV makes if and when it gets to $90 will be important to consider. Energy Sector SPDRs (XLE)The Energy Sector SPDR (NYSEARCA:XLE) continues to trend lower.The XLE started its downtrend last month when it failed at resistance around the $64.50 level. This level was resistance in May, and then again in July.A break of the downtrend line here could be a signal that the selloff that has occurred in the SPY may be coming to an end. Industrial Sector SPDR (XLI) The Industrial Sector SPDR (NYSEARCA:XLI) failed at the resistance at the $78.50 level.You don't need to be a market guru or a master trader to see that this level is important. It was resistance at the end of April and in early May. The XLI has also broken its recent uptrend that began in June. Obviously drawing trendlines is an art and not a science, but if you understand what they illustrate you can profit. * 10 Generation Z Stocks to Buy Long When markets are going up, the forces of demand are in control, and when they are trending lower the forces of supply are in control. If they are consolidating or trading sideways, the forces are equal. The breaking of a trendline means that the leadership may be about to change or equalize. The break of the uptrend line here could be an early indication a downtrend is beginning. S&P 500 SPDR (SPY)The S&P 500 SPDR ETF is testing important support. These are some dynamics to consider to gain insight into whether or not this important level will break or hold. Probably the most important thing to watch is how the XLF reacts to the $28 level. If they do not rebound over the next few days, it will be very bearish for the SPY.It is also important thing is how the XLY reacts to the $121 level. If it does not rebound over the next few days and this level becomes resistance, this could also be very bearish for the SPY.The way the XLK reacts to the $79 support level is important as well. If this level breaks, watch out below.I will also be watching to see if the trends in the XLV and XLE continue. A break of these downtrend lines would be bullish for the SPYs.Most of the dynamics that I see are bearish and I do expect the market to start trending lower. Every time the market sells off after a rally, it seems like people forget that markets go down as well as up.Considering the gains that the market has made since early June some profit taking would not be surprising.As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on the Trade War Dip * The 5 Highest-Rated Dow Stocks Right Now * 4 Cybersecurity Stocks to Buy for Long-Term Gains The post 7 SPDR ETFs and What They Tell Us About the Market appeared first on InvestorPlace.
August saw an awful start with global markets in the red mainly due to renewed trade tensions. Such market and ETF activities could rule the market in August.
When it comes to sectors that often benefit from lower interest rates and declining Treasury yields, investors usually think of high dividend, defensive groups such as real estate and utilities. The Health Care Select Sector SPDR ETF (XLV) , the largest exchange traded fund (ETF) dedicated to the sector is trailing other sectors and the S&P 500 this year, but healthcare is attractively valued relative to some other defensive groups. Investors embraced healthcare stocks for the sector’s growth and defensive characteristics, providing investors with yields and valuations that are less stretched than other yield-producing stocks like utilities.
There was a time when sector exchange-traded funds (ETFs) were widely considered the territory of more sophisticated, tactical investors. But now, thanks in large part to the proliferation of industry and sector ETFs, more advisors and investors are using these products.Yes, sector ETFs still have plenty of applications on a tactical basis. With markets in the midst of another earnings season, short-term traders can tap sector ETFs when a particular group delivers a slew of earnings reports in a condensed time frame, as has been the case with financial services stocks this week.Additionally, investors can tap sector ETFs for longer-term purposes. Say you want to generate income or lower volatility, sector ETFs tracking consumer staples or utilities stocks could make for ideal additions to your portfolio. Likewise, investors wanting to latch onto growth may want to consider positions in dedicated consumer discretionary or technology sector ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Buy From This Superstar Fund For investors looking for dedicated sector exposure, here are some industry-specific funds to consider. Fidelity MSCI Communication Services ETF (FCOM)Expense ratio: 0.084% per year, or $8.40 on a $10,000 investment.The communication services sector is a mix of growth stocks, such as Facebook Inc. (NASDAQ:FB) and Alphabet Inc. (NASDAQ:GOOG NASDAQ:GOOGL), and old guard telecommunications stocks. However, sector ETFs such as the Fidelity MSCI Communication Services ETF (NYSEARCA:FCOM) are usually heavily allocated to the group's growth fare.For example, Facebook and the two classes of Alphabet stock combine for over 40% of FCOM's weight. This sector ETF and its rivals are worth considering over the near term for multiple reasons. First, Alphabet and Facebook, for varying reasons, are facing considerable Congressional scrutiny and there are efforts to break these and other tech companies up.Second, more than 60% of the communication services sector reports earnings this week. For long-term investors, FCOM has utility as well, including the fact that Fidelity's sector ETF's are the industry's cheapest. Consumer Discretionary Select Sector SPDR (XLY)Source: Shutterstock Expense ratio: 0.13%The Consumer Discretionary Select Sector SPDR (NYSEARCA:XLY) is the oldest and largest sector ETF dedicated to consumer cyclical stocks and has, over the years, risen to acclaim for being an adequate proxy on shares of Amazon.com (NASDAQ:AMZN). That is an accurate assessment as this sector ETF allocates about 23.5% of its weight to Amazon, more than double its second-largest holding.All three of the Dow Jones Industrial Average's consumer discretionary components -- Home Depot (NYSE:HD), McDonald's (NYSE:MCD) and NIKE (NYSE:NKE) -- reside in XLY and combine for over 22% of the fund's weight. * 7 Stocks to Buy This Summer Earnings Season XLY provides exposure to "retail (specialty, multiline, internet and direct marketing); hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; auto components; distributors; leisure products; and diversified consumer services" companies, according to State Street. Global X MSCI China Consumer Discretionary ETF (CHIQ) Source: Shutterstock Expense ratio: 0.65%Let's stick with consumer cyclical stocks for a moment and let the Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ) serve as a reminder that investors do not need to confine their search for the best sector ETFs to domestic offerings. There are plenty of ex-US sector ETFs on the market and one of the better offerings, at least for risk-tolerant investors, is CHIQ."Among the most powerful are those areas tied to the rising impact of China's consumers, who have experienced years of high wage growth, migration into cities, and an expansion of internet connectivity," said Global X in a recent note. "The government has also made consumption a priority as the economy transitions away from export-led industries."Sure, CHIQ can be seen as the XLY of China and, yes, that is a positive trait. Data confirm as much."China's Consumer Discretionary sector is the country's largest by total market cap, yet it is still just half the size of its US counterpart. This is despite the fact that China's population is four times larger than the US's and is experiencing a rapidly growing middle class, suggesting that the sector is still in its early stages of growth," according to Global X. Health Care Select Sector SPDR (XLV)Source: Shutterstock Expense ratio: 0.13%After ranking as the S&P 500's best-performing sector in 2018, the healthcare sector is the worst-performing group in the U.S. this year. Still, the Health Care Select Sector SPDR (NYSEARCA:XLV) is up more than 6% year-to-date despite a political environment that, at times, feels increasingly hostile toward healthcare stocks.Aside from its defensive traits, there are reasons to consider XLV or related sector ETFs, including these funds being home to some big-name stocks that are expected to lead major U.S. equity benchmarks to new highs. Plus, the sector's 2019 lethargy could be a sign value is emerging in the S&P 500's second-largest sector weight. * 5 Dow Jones Stocks to Sell Before the Market Slumps "A closer look shows that the large drugmakers are holding back the health care sector," reports Investor's Business Daily. "Of the 10 worst-performing stocks in the sector and the XLV ETF, seven are diversified pharmaceutical firms or biotechs. These stocks tend to suffer during years of heavy political activity. Already, several Democratic candidates have put drug prices at the forefront of their campaigns." Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS)Source: Shutterstock Expense ratio: 0.40%Most consumer staples funds, and sector ETFs for that matter, are cap-weighted funds, but investors may able to generate higher returns in the right settings by favoring an equal-weight strategy such as the Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSEARCA:RHS). The obvious difference between RHS and a cap-weighted rival is, well, average market value.The average market capitalization of RHS's 33 holdings is $63.8 billion, but the figure swells to $150.8 billion for biggest cap-weighted consumer staples ETF. In the cap-weighted Consumer Staples Select Sector Index, the largest holding is Procter & Gamble (NYSE:PG) at nearly 16% of the benchmark's weight. Conversely, the top holding in RHS commands barely more than 3% of the sector ETF's roster.Although RHS leans toward smaller stocks, it is not significantly more volatile than competing cap-weighted funds. Invesco S&P SmallCap Information Technology ETF (PSCT)Source: Shutterstock Expense ratio: 0.29%For years, investors have been regaled with tales of exponential returns offered by small-cap technology stocks. However, stock picking in this arena is difficult, making the Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT) an appealing options for those seeking small-cap tech exposure.PSCT's 87 holdings have an average market value of $1.83 billion, putting this sector fund at the higher end of small-cap territory. As is to be expected, PSCT is a growth-heavy sector with growth stocks accounting for quadruple the weight assigned to the fund's value fare.While PSCT is not excessively valued compared to broader small-cap ETFs, the sector ETF usually is much more volatile than standard small-cap benchmarks, indicating this fund is more appropriate for risk-tolerant investors. That said, PSCT offers compensation for that elevated volatility because it usually outperforms basic small-cap indexes over longer holding periods. Hoya Capital Housing ETF (HOMZ)Expense ratio: 0.45%Real estate is one of the smallest sector weights in the S&P 500, but despite that diminutive status, the group is well-represented in the ETF space. One of the new offerings on that front is the Hoya Capital Housing ETF (NYSEARCA:HOMZ), which focuses on residential real estate and the related equity investment opportunities.HOMZ follows the Hoya Capital Housing 100 Index, an in-house benchmark designed to provide exposure to various elements of the home-buying process, including home builders, home rental operators, home services and technology firms, and home improvement retailers. The fund, which expects to pay a dividend on a monthly basis, is also levered to the rental theme."HOMZ offers exposure to the companies that own more than a million rental units across the United States including apartments, single family rentals, and affordable housing," according to the issuer. * 7 5G Stocks to Connect Your Portfolio To HOMZ is about four months old and is up nearly 9% since inception.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy From This Superstar Fund * 7 Stocks to Buy This Summer Earnings Season * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post 7 Great Sector ETFs to Buy for the Short or Long Term appeared first on InvestorPlace.
With earnings surprise in cards, the healthcare sector is expected to witness earnings growth of 1.7% in the second quarter, suggesting continued outperformance for healthcare ETFs.
Many investors watch the headlines like hawks, but moves in the market aren't as dependent on those as many people think. More often, stock market moves are due either to noise or to how markets react when they reach important levels. And considering those, Amazon (NASDAQ:AMZN) and these six SPDR ETFs are telling me that the rally is over for now.For an example of noise, suppose a person deposits money into a mutual fund at the same time that another person withdraws twice as much. The traders at this mutual fund will now need buy stocks to invest the deposit. At the same time, they will need to sell twice as many shares of the same stocks to raise the funds for the withdrawal. This will cause the prices to go lower. This happens thousands of times across the world every hour of every day. You can understand how it could move the markets.Then there's the reaction the various sectors have when they get to important levels. For example, I think this rally is over for now because most of the economic sectors that make up the S&P 500 are at or just under resistance.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip In addition, the consumer discretionary sector has been one of the leaders of the recent rally and it is losing momentum. AMZN is the largest component of this sector and it is overbought and at resistance.First, we will look at some sectors and you will see what I mean. Then we'll go over levels in Amazon stock. And lastly, we will look at the SPY. Industrial Sector SPDR (XLI)The Industrial Sector SPDR (NYSE:XLI) is testing resistance at the $78.50 level. You don't need to be a Market Guru or a Master Trader to see that this level is important. It was resistance at the end of April and in early May.According to academics and random-walk believers, support and resistance levels shouldn't exist. After all, how can a basket of dozens of stocks have the same exact valuations at two very different points in time?But support and resistance levels obviously exist. You do not need to have a PHD to see them. Financial Sector SPDR (XLF)The Financial Sector SPDR (NYSE:XLF) is testing resistance around the $28 level. This level was resistance in April.During last August and September, the financial sector did not participate in the rally. That was one of the key signals that the market was nearing a major top. * 7 Dependable Dividend Stocks to Buy This shows why it is important to examine the undercurrents in the markets in order to really understand how to profit. Last summer the media was going crazy over the bull market, just like now. There was talk of melt-ups and amazing new records. However, savvy investors saw the underlying weakness in the financials and knew that this was a signal that the rally was about to end. Health Care Sector SPDR (XLV)The Health Care Sector SPDR (NYSE:XLV) has been consolidating around resistance at the $93 level and it may be starting to trend lower. The $93 level was resistance in February as well. One of the main reasons for this is that Johnson and Johnson (NYSE:JNJ) is 10% of this sector and some analysts think the company is facing some significant headwinds.JNJ just reported earnings that were better than analysts expected, and yet the stock price still dropped. This is probably because JNJ is being sued for its role in the opioid crisis, and investors are worried about the outcome. It is also being sued for allegedly selling dangerous talcum power for babies.I am not a lawyer and won't guess what the ultimate outcome of these lawsuits will be. What I do know is that even if JNJ stock is innocent of these accusations, it will still incur significant legal costs and damage to its reputation. Utilities Sector SPDR (XLU)The Utilities Sector SPDR (NYSE:XLU) has been testing resistance around the $28 level over the past month. This sector typically pays higher dividends than most others. Because of this, there has been more interest than usual in this sector due to the action of the yield curve.The yield curve illustrates the yield on bonds of all different durations. The vast majority of the time, the longer the term of the bond, the higher the rate of interest that it will pay. This is simply because the longer the timeframe, the greater the odds are that the bond will default. In order to take on this extra risk, investors need a higher return. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond When the yield curve inverts, it means that shorter-term rates are actually higher than long-term rates. This is typically an indication that traders are bearish on the economy. They do not want to hold short-term bonds. They sell, and this drives down the price and makes the interest rates go up. Then they buy long-term bonds and makes the price rise and the yield fall. Consumer Discretionary Sector SPDR (XLY)The Consumer Discretionary Sector SPDR (NYSE:XLY) has been one of the leaders of the recent rally. However, the sector is now very overbought. The last time it was this overbought was in April, and a large move lower followed. A big part of the reason for this is AMZN stock. Amazon is about 20% of this sector, and it is at resistance.If the XLY heads lower, there will probably be support around the $121 level. This because this level was resistance in April and June.What does the term "overbought" mean? It is a measure of a stock's momentum, looking at where the price is now versus where it was X days ago. When stocks reach extremes of this measurement, traders refer to it as overbought or oversold.For example, according to statistics, 95% of all trading should be within two standard deviations of the average. If a stock is trading more than two standard deviations above or below the average, it would be considered overbought or oversold. It will most likely revert back to its average. Amazon (AMZN)Amazon is overbought and testing resistance. The last two times AMZN stock was this overbought were in September and May. A large selloff followed both times. In addition, it is testing resistance around the $2020 level. There is resistance at this level because it was the top and an all-time high last September. Stocks frequently run into resistance when they get to levels that were prior tops. * 10 Stocks Driving the Market to All-Time Highs (And Why) There is also excessive bullish sentiment on AMZN. Currently, 47 Wall Street firms follow it and every single one has a buy rating on it. Excessive bullish sentiment is actually a bearish indication. This is because if everyone likes the stock, everyone has bought it. Now there are no buyers left and the only way it can do is lower. S&P 500 SPDR (SPY)The S&P 500 SPDR (NYSEARCA:SPY) is also overbought. If it heads lower, there will probably be support around the $294 level because it was a resistance level in April. Why do resistance levels become support levels? Consider the following.After hitting the resistance at $294 the SPY traded lower. Those who sold it are happy that they sold. Those who shorted it have a profit. But then the SPY rallied. Now those who sold it tell themselves that if the SPY comes back to $294, they will buy it back. Those who shorted it are now losing money. They tell themselves they will cover it at $294 and break even.Those who bought it at $294 are happy that it went higher and tell themselves that if the SPDRs come back they will buy more. Add to that the professional traders who see a clear level and want to profit from it, and now we have 4 groups of investors who want to buy the SPYs at $294.As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post These 6 SPDR ETFs and Amazon Tell Me the Rally Is Over appeared first on InvestorPlace.
The Health Care Select Sector SPDR ETF (XLV) , the largest exchange traded fund (ETF) dedicated to the sector, is up 7.09% this year and trailing the S&P 500, but the healthcare sector could be poised for bigger things in the second half of 2019. Among other factors, XLV and friends have been dogged this year by speculation that Medicare For All could become a reality if Democrats win the White House in 2020. “Of the 10 worst-performing stocks in the sector and the XLV ETF, seven are diversified pharmaceutical firms or biotechs.
More than half (55%) of employees rate their own financial wellness as good or excellent, down slightly from a year ago, according to Bank of America's 2019 Workplace Benefits report. Lisa Margeson, Managing Director, Head of Retirement Client Experience, Bank of America, joins Yahoo Finance's Alexis Christoforous to discuss.
Yahoo Finance’s Yahoo Finance’s Adam Shapiro, Julie Hyman, Adriana Belmonte, Rick Newman, and Scott Gamm discuss.
Healthcare continues to dominate the conversation in the Democratic Presidential debates and night two was no exception. Former Vice President Biden argued that "Medicare for all" proposals were too disruptive, saying "if you noticed, there is no talk about the fact that the plan in 10 years will cost $3 trillion. You will lose your employer-based insurance." Dan Clifton, Head of Policy Research at Strategas Research Partners, joins Yahoo Finance's Akiko Fujita.