Looking at the best- and worst-performing sectors from last week, I’m getting a bit of déjà vu.
Here’s how things shook out as major indexes continue to trade near all-time highs:
Key Insights:
- The S&P 500 (SPY) climbed 1% higher.
- Five sectors beat the S&P 500, while six sectors lagged.
- The health care sector (XLV) was the top performer with a 4.7% gain.
- The utilities sector (XLU) lagged the rest at -0.7%.
Since launching What My System Says Today in March, we’ve featured both the health care and utilities sectors multiple times. That’s bound to happen when using a data-driven approach like we do here. We’re beholden to where the market action lies…
With health care under pressure of potential spending cuts, and utilities involved in the next stage of the AI mega trend — supplying the power to make AI actually work — it makes sense to see some significant price swings in these sectors.
Luckily, our systematic approach can also help draw some conclusions.
Let’s see what we can sus out using my Green Zone Power Rating system…
Is the Health Care Sector Turning a Corner?
Seeing a sector almost 5X the broader S&P 500 is always exciting. However, as investors, we want to know if these are sustainable trends. As you know, past performance doesn’t guarantee future performance…
Below, you’ll find 10 health care stocks that closed last week within 10% of their 52-week highs and how they stack up in my Green Zone Power Rating system:
Zooming out, the health care sector is actually still down 1% year to date. That looks pretty bad considering the S&P 500 is up almost 10%.
But what the data in the table above tells me is that there’s a high concentration of “Bullish” stocks in the health care sector. Of the 10 stocks above, six rate “Bullish” in my system. As a reminder, these stocks are poised to outperform the broader S&P 500 by 2X or better over the next 12 months…
Tomorrow, I’ll take a closer look at the broader health care sector to see how things stack up.
But if you want to dig into the data yourself, you can do so by joining my flagship Green Zone Fortunes now. (Click here to see how you can do that now.) You’ll gain full access to my Green Zone Power Rating system and can look up any of these tickers and see how they rate both overall and on each of my six individual factors.
Now, let’s look at last week’s lagging sector…
A Closer Look at the Utilities Sector
The utilities sector was one of only four sectors to finish in the red last week.
But when I ran our typical Monday screen, it didn’t turn up any S&P 500 utilities stocks that are trading within 10% of their 52-week lows.
That makes some sense considering the broader sector is still up almost 13% since January 1.
So I adjusted our screen slightly. Below, you’ll see seven stocks that recorded a loss for the week and are now trading within 20% of their 52-week lows:
Overall, these losses are much more measured, with the worst performers, Consolidated Edison Inc. (ED) and Public Service Enterprise Group (PEG), losing only 2.8% and 2.7% respectively.
But unlike the health care sector, there isn’t a single “Bullish” stock within my Green Zone Power Rating system on this list.
I warned about this a couple of weeks ago in our Tuesday sector x-ray, where I showed you that only six utilities stocks currently rate “Bullish” or better.
With broader outperformance this year and an AI mega trend that still has plenty of runway ahead, I expect the utilities sector to do well in this market environment.
But it’s clear that some stocks are pulling more of the weight than others…
To good profits,
Editor, What My System Says Today