Sector SPDR ETFs

If you're interested in broad exposure to the Consumer Discretionary - Broad segment of the equity market, look no further than the Consumer Discretionary Select Sector SPDR ETF (XLY), a passively managed exchange traded fund launched on 12/16/1998.

The XLE ETF, dominated by Exxon and Chevron, has decoupled from WTI crude oil prices over the past 18 months, suggesting a potential profit-taking opportunity. At current oil prices, the P/E ratio may rise to over 20x over the next 12 months, which would be expensive for a sector that is barely growing. Investors are likely to be better off buying oil futures rather than the XLE, as the current ratio implies negative excess returns over the coming years.

REITs have shown strong performance, particularly in recent months. After correlating closely with TLT for several years, it has now significantly diverged. We look at the causes of the divergence and why XLRE remains a "buy."

With just over a month remaining in 2024, the tech sector stands out as one of the year's top performers. The Technology Select Sector SPDR ETF NYSE: XLK, which tracks the performance of leading tech stocks, has gained an impressive 21.3% year-to-date.

The healthcare sector, including the SPDRs Select Health Care ETF, faces high uncertainty due to political factors and elevated valuations, prompting a downgrade from hold to sell. My investment approach prioritizes low-risk and tactical decisions. In the current market climate, that produces more short-term gains rather than long-term holds, which increasingly lead to whipsaw situations. XLV's technical indicators suggest more downside risk than upside potential, with a 60% chance of the next 10% move being down, not up. That makes it unattractive for now.

XLK seems to be poised for a short-term continuation of upside trend, due to Trump's potential re-election and Powell's dovish monetary stance. Current economic indicators and strong Q3 earnings point to a positive outlook for XLK, but rising T-Note yields signal potential inflation risks ahead. The pressure from Trump's policies and upcoming debt maturities forces regulators into a "difficult open-heart surgery".

The Financial Select Sector SPDR ETF (XLF) has been in a strong bull run and is sitting at its all-time high as investors welcomed Donald Trump. The fund, which tracks the biggest companies in the financial services industry, has risen for five consecutive months, reaching a high of $49.55 on Wednesday.

The Investment Committee give you their top stocks to watch for the second half.

XLRE offers real estate exposure for those who shy away from cherry-picking, which is an understandable approach. Unfortunately, an instrument seemingly aimed to provide diversification benefits, comes with a high holding concentration. XLRE should be accompanied by solid tailwinds, but I prefer to stick to an active approach.