November 2024 Sector SPDR Analyzer
Week Ending November 4, 2022
Domestic stocks fell last week, with the Tech-heavy NASDAQ 100 (QQQ) shedding nearly 6%. However foreign shares did better, with Emerging Markets in particular posting strong gains (Table 1).
For this week’s valuation metric we examine an unconventional—and many would argue contrary—indicator: analysts’ ratings. We translated the standard five-tier rating system (Strong Buy/Buy/Hold/Sell/Strong Sell) for individual stocks into a 0-100 scale to measure analysts’ consensus sentiment. (100 indicates all analysts have a Strong Buy rating).
Analysts are an optimistic bunch, which is why nearly everything falls somewhere in Buy territory. Nonetheless, stocks still react to analyst upgrades and downgrades, so monitoring their relative bullishness as well as changes in sentiment can still be worthwhile.
Currently analysts are most bullish on stocks in the NASDAQ 100 and Emerging Markets (EEM), while being relatively bearish for mid-caps (MDY), though sentiment there is notably more positive than it has been on average over the past five years.
TABLE 1: Major Benchmarks: Weekly Total Returns and Valuation Update
Week ending November 4, 2022
| Ticker | Fund | Return | Current Rtg. | 5 yr. Avg | Prem/Disc. |
| SPY | SPDR S&P 500 ETF Trust | -3.3% | 77.5 | 77.5 | 0.0% |
| QQQ | Invesco QQQ Trust | -5.9% | 80.0 | 81.0 | -1.2% |
| MDY | SPDR S&P Midcap 400 ETF Trust | -1.2% | 74.0 | 71.0 | 4.2% |
| IWM | iShares Russell 2000 ETF | -2.4% | 76.5 | 74.5 | 2.7% |
| EFA | iShares MSCI EAFE ETF | 1.5% | 75.5 | 72.0 | 4.9% |
| EEM | iShares MSCI Emerging Markets ETF | 5.6% | 80.0 | 79.5 | 0.6% |
Source: FactSet Research Systems and ETF Research Center.
Among sectors, Energy (XLE) was the best performer last week, gaining 2.4%, while Communication Services (XLC) and Tech (XLK) both tanked more than 6%.
Despite this, analysts remain more bullish on the Tech sector than any other, but that sentiment is about were it has been (i.e., it is only 0.6% higher than average). Meanwhile analysts are most bearish, relatively speaking, on Financials (XLF). Notably, sentiment on Real Estate (XLRE) stocks is much better than it has been in recent years, and tied with Consumer Discretionary (XLY) for analysts’ top picks after Technology.
TABLE 2: Major Sectors: Weekly Total Returns and Valuation Update
Week ending November 4, 2022
| Ticker | Fund | Return | Fwd. P/BV | 10 yr. Avg | Prem/Disc. |
| XLC | Communication Services Select Sector SPDR | -6.8% | 77.5 | 81.0 | -4.3% |
| XLY | Consumer Discretionary Select Sector SPDR | -5.1% | 79.0 | 80.0 | -1.3% |
| XLP | Consumer Staples Select Sector SPDR | -1.8% | 71.0 | 71.0 | 0.0% |
| XLE | Energy Select Sector SPDR | 2.4% | 76.0 | 75.5 | 0.7% |
| XLF | Financial Select Sector SPDR | -0.8% | 70.5 | 71.5 | -1.4% |
| XLV | Health Care Select Sector SPDR | -1.5% | 77.0 | 78.5 | -1.9% |
| XLI | Industrial Select Sector SPDR | 0.5% | 71.5 | 72.5 | -1.4% |
| XLB | Materials Select Sector SPDR | 0.9% | 74.0 | 74.5 | -0.7% |
| XLRE | The Real Estate Select Sector SPDR | -1.7% | 79.0 | 73.5 | 7.5% |
| XLK | Technology Select Sector SPDR | -6.6% | 81.5 | 81.0 | 0.6% |
| XLU | Utilities Select Sector SPDR | -0.5% | 71.5 | 69.5 | 2.9% |
Source: FactSet Research Systems and ETF Research Center.
Related posts
