SMO Exclusive: SPDR Sector ETFs Strength Report Tuesday 2024-10-15

Brian Degracia

15 Oct 2024 • 8 min read

STRENGTHENING for the week ending Tuesday 2024-10-15 as six of 11 ETFs strengthened enough to change rating (green bars) while none weakened enough to change rating. Nine strengthened/one weakened generally. XLF/Financial and XLU/Utilities are strongest at 2VeryStrong. Weakest is XLE/Energy. The Composite Score is 3.2, a healthy one-week strengthening of 0.6.

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.

Today's Market Context

Key Headlines

"Dow ends down 320 points, Nasdaq tumbles 1% as chip stocks fall" (Marketwatch)
"Chip company ASML shares plunge 16% after warning of weaker China sales in early release" (CNBC)

Key Current Readings
SP500: 5,815
Nasdaq: 18,316
Nasdaq 100: 20,160
Russell 2000: 2,250
10Y Treasury: 4.03%
2YT: 3.95%
Oil (WTI Crude): $71
Bitcoin: $66,719
Dollar Index: 103.26
Gold: $2,678
VIX: 20.64
(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 2024-10-15, as follows:

ETFs Summary
1.1 Current Overview
1.2 Historical Summaries
ETFs Detail
2.1 XLB Basic 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 Healthcare
2.11 XLY Consumer
Stock Detail (download)

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: Basic Materials, Energy, and Industrials
Second row: interest rate-sensitive ETFs Financials, Real Estate, and Utilities
Third row: Technology and Telecommunications
Bottom row: Consumer Staples, Consumer Discretionary, and Healthcare

The headers for each graphic are color-coded. ETFs rated 4Strong or better have green headings - currently, 10 of 11 ETFs qualify. The remaining ETF XLE/Energy has a 5Average rating and was the only one that weakened during the week. Note also that the chart borders are green for those ETFs whose ratings strengthened this week.

ETFs Stronger than the 3.2 Composite Score:
- XLB/Basic Materials (Strengthened rating)
- XLC/Communications (Strengthened rating)
- XLF/Financial (Strengthened rating)
- XLI/Industrials (Strengthened)
- XLRE/Real Estate (Strengthened)
- XLU/Utilities (Unchanged)
- XLY/Consumer Discretionary (Strengthened rating)

ETFs Weaker than the 3.2 Composite Score:
- XLE/Energy (Weakened)
- XLK/Technology (Strengthened)
- XLP/Consumer Staples (Strengthened rating)
- XLV/Healthcare (Strengthened rating)

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 fully detailed Stock Market Organizer world is comprised of 5 levels: stocks -> sub-industries -> industries -> sectors -> market. The sector definitions do not correspond exactly with those of the SPDR ETFs but for this analysis the ETF stocks are used.

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 The Materials Select Sector SPDR Fund (XLB) - 27 stocks (small) - strengthened rating to 3Stronger

Includes securities of companies from the following industries: chemicals; metals and mining; paper and forest products; containers and packaging; and construction materials.

The XLB strength rating improved one level and there are 15 1Strongest candidates, of which 3 improved to that level this week (BALL/Ball Corp, AVY/Avery Dennison Corp, and IP/International Paper Company).

2.2 The Communication Services Select Sector SPDR ETF Fund (XLC) - 22 stocks (small), strengthened rating to 3Stronger

Includes companies that have been identified as Communication Services companies by the GICS®, including securities of companies from the following industries: diversified telecommunication services; wireless telecommunication services; media; entertainment; and interactive media & services.

Communication strengthened one level powered by 3 stocks which strengthened to 1Strongest (EA/Electronic Arts, GOOG/Alphabet, and GOOGL/Alphabet Class A). There are also 10 stocks which remained 1Strong for the week.

2.3 The Energy Select Sector SPDR Fund (XLE) - 22 stocks (small), unchanged rating at 5Average = worst rating

Includes companies that have been identified as Energy companies by the GICS®, including securities of companies from the following industries: oil, gas and consumable fuels; and energy equipment and services.

XLE/Energy was the sole ETF that weakened this week, though not enough to change strength rating. SLB/Schlumberger weakened to 9Weakest and there were 5 other stocks that retained that rating for this week (DVN/Devon Energy Corp, APA/APA Corporation, OXY/Occidental Petroleum, HAL/Halliburton Co, and PSX/Phillips 66).

2.4 The Financial Select Sector SPDR Fund (XLF) - 72 stocks (large), strengthened rating to 2VeryStrong = best rating (tied, XLU/Utilities)

Includes companies that have been identified as Financial companies by the Global Industry Classification Standard, including securities of companies from the following industries: financial services; insurance; banks; capital markets; mortgage real estate investment trusts; and consumer finance.

This STRENGTHENED one rating this week and is now the highest-rated ETF at 2VeryStrong, tied with XLU/Utilities. There are many 1Strongest Stocks, both those which strengthened to that level this week and which began the week there and remained at that level.

2.5 The Industrial Select Sector SPDR Fund (XLI) - 76 stocks (large), unchanged rating at 3Stronger

Includes companies that have been identified as Industrial companies by the Global Industry Classification Standard, including securities of companies from the following industries: aerospace and defense; industrial conglomerates; marine transportation.

This ETF strengthened this week though not enough to change strength rating. Eight of its 76 stocks strengthened to 1Strongest this week.

2.6 The Technology Select Sector SPDR Fund (XLK) - 69 stocks (large), unchanged rating at 4Strong

Like XLI/Industrials, this ETF strengthened this week though not enough to change strength rating. Four of its 69 stocks strengthened to 1Strongest this week - HPQ/HP Inc, MSFT/Microsoft, TRMB/TrimbleInc, and ROP/Roper Technologies.

2.7 The Consumer Staples Select Sector SPDR Fund (XLP) - 38 stocks (mid-sized), strengthened rating to 4Strong

Includes companies that have been identified as Consumer Staples companies by the GICS®.

XLP rose one strength rating this week. This ETF has five stocks which strengthened to 1Strongest - PG/Proctor & Gamble, KMB/Kimberly Clark Corp, PEP/Pepsico, KDP/Keurig Dr. Pepper Inc, and MKC/McCormick & Co. Five other stocks remained 1Strongest this week - CLX/Clorox, K/Kellogg, WMT/Walmart, COST/Costco, and KR/The Kroger Company.

2.8 The Real Estate Select Sector SPDR Fund (XLRE) - 31 stocks (small/mid-sized), unchanged rating at 3Stronger

Includes companies that have been identified as Real Estate companies by the Global Industry Classification Standard (GICS®).

XLRE/Real Estate strengthened one level and there were only strength improvements among the component stocks. AMT/American Tower Corp, VICI/VICI Properties, DOC/Physicians Realty Trust, AVB/AvalonBay Communities, and EQR/Equity Residential all strengthened to 1Strongest this week.

2.9 The Utilities Select Sector SPDR Fund (XLU) - 31 stocks (small/mid-sized), unchanged rating at 2VeryStrong = best rating (tied, XLF/Financial)

Includes securities of companies from the following industries: electric utilities; water utilities; multi-utilities; independent power and renewable electricity producers; and gas utilities.

XLU/Utilities was unchanged for the week ending Tuesday 2024-10-15 after weakening one strength rating last week from the 1Strongest rating. Most stocks in this ETF are rated 1Strongest with the weakest being AES which is 6Weak.

2.10 The Health Care Select Sector SPDR Fund (XLV) - 61 stocks (large), strengthened rating to 4Strong

Includes companies from the following industries: pharmaceuticals; health care equipment & supplies; health care providers & services; biotechnology; life sciences tools & services; and health care technology.

XLV/Healthcare strengthened one strength rating this week and there were a fair number of stocks that enjoyed strength rating increases.

2.11 The Consumer Discretionary Select Sector SPDR Fund (XLY) - 51 stocks (mid-sized/large), strengthened rating to 3Stronger

Includes companies that have been identified as Consumer Discretionary companies by the Global Industry Classification Standard (GICS®).

XLY/Consumer Discretionary strengthened one strength rating this week with five stocks that strengthened to reach 1Strongest status: TPR/Tapestry Inc, NCLH/Norwegian Cruise Line Holdings, MHK/Mohawk Industries, AMZN/Amazon.com, TJX/TJX Companies.

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.

SMO ETF Strength Report Stocks 2024-10-15

SMO ETF Strength Report Stocks 2024-10-15.pdf

2 MB