December 2024 Sector SPDR Analyzer
Week Ending September 16, 2022
Equity markets tanked last week following the hot inflation report that investors believe will force the Fed’s hand with larger rate increases. U.S. large, mid- and small-caps all performed similarly, loosing between 4.5% and 4.8% of their value, while foreign shares held up a little better, falling just over 3%.
This week’s valuation update focuses on dividend yields. While stocks in the S&P 500 SPDR (SPY) offer a paltry yield of just 1.8%, below their 10 year average of a still-paltry 2.0%, foreign stocks offer yields at least twice as much (3.6%-3.8%), well above their 10 year averages.
TABLE 1: Major Benchmarks: Weekly Total Returns and Valuation Update
Week ending September 16, 2022
| Ticker | Fund | Return | Fwd. Yld | 10 yr. Avg | Prem/Disc. |
| SPY | SPDR S&P 500 ETF Trust | -4.8% | 1.8 | 2.0 | -10.0% |
| QQQ | Invesco QQQ Trust | -5.8% | 1.0 | 1.3 | -23.1% |
| MDY | SPDR S&P Midcap 400 ETF Trust | -4.7% | 1.8 | 2.3 | -21.7% |
| IWM | iShares Russell 2000 ETF | -4.5% | 1.8 | 2.9 | -37.9% |
| EFA | iShares MSCI EAFE ETF | -3.3% | 3.8 | 2.9 | 31.0% |
| EEM | iShares MSCI Emerging Markets ETF | -3.1% | 3.6 | 2.3 | 56.5% |
Source: FactSet Research Systems and ETF Research Center.
All 11 sectors fell last week. Materials sold off the hardest at 6.6%, but followed closely by Industrials, Communication Services, Tech and Real Estate. Health Care fared best (-2.3%) followed by Energy (-2.7%).
Real Estate, Energy and Utilities offer the highest yields, all above 3.0%, but only Real Estate’s yield of 3.4% is above its 10 year average. Utilities, traditionally a higher yielding sector, has a yield of 3.1%, well below its 10 year average of 3.7%. Meanwhile the lowest yields are found in the Consumer Discretionary sector at just 1.0%, but that is in line with the sector’s historical average.
TABLE 2: Major Sectors: Weekly Total Returns and Valuation Update
Week ending September 16, 2022
| Ticker | Fund | Return | Fwd. Yld | 10 yr. Avg | Prem/Disc. |
| XLC | Communication Services Select Sector SPDR* | -6.3% | 1.1 | 1.1 | 0.0% |
| XLY | Consumer Discretionary Select Sector SPDR | -4.0% | 1.0 | 1.2 | -16.7% |
| XLP | Consumer Staples Select Sector SPDR | -3.6% | 2.7 | 2.9 | -6.9% |
| XLE | Energy Select Sector SPDR | -2.7% | 3.3 | 3.5 | -5.7% |
| XLF | Financial Select Sector SPDR | -3.8% | 2.4 | 2.0 | 20.0% |
| XLV | Health Care Select Sector SPDR | -2.3% | 1.7 | 1.9 | -10.5% |
| XLI | Industrial Select Sector SPDR | -6.4% | 2.0 | 2.3 | -13.0% |
| XLB | Materials Select Sector SPDR | -6.6% | 2.3 | 2.2 | 4.5% |
| XLRE | The Real Estate Select Sector SPDR* | -6.3% | 3.4 | 3.3 | 3.0% |
| XLK | Technology Select Sector SPDR | -6.2% | 1.1 | 1.5 | -26.7% |
| XLU | Utilities Select Sector SPDR | -3.8% | 3.1 | 3.7 | -16.2% |
Source: FactSet Research Systems and ETF Research Center. *Note: Fewer than 10 years of valuation history available.
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