The S&P 500 (SP500) on Friday advanced 2.47% for the week to close at 4,070.56 points, while the accompanying SPDR S&P 500 Trust ETF (NYSEARCA:SPY) added 2.48%.
The advance adds to the overall positive start of the benchmark for the new Year. The S&P 500 has now posted gains in three of the first four weeks of 2023.
Investors returned to growth stocks during the week, with consumer and technology companies gaining the most. Market participants squared their positions and bought shares ahead of the first meeting of the Federal Reserve’s monetary policy committee next week. The central bank is widely expected to downshift at a 25 basis point rate hike, and the general consensus is that aggressive Fed rate hikes are now off the table.
The week also saw Q4 earnings season kick into gear. The results of many major companies have come in and for the most part they have been mixed. The technology sector saw reports from stalwarts like Microsoft (MSFT), IBM (IBM) and Intel (INTC), with all three investors disappointed. On the other hand, the numbers and guidance from electric vehicle maker Tesla (TSLA) were applauded.
Dow 30 components 3M (MMM), Verizon (VZ), Travelers (TRV), Johnson & Johnson (JNJ), Boeing (BA), Visa (V), American Express (AXP), and Chevron (CVX) were among the other companies . to report your results.
Next week earnings season will be even more active, with household names including Apple (AAPL), Amazon (AMZN), Meta (META) and Alphabet (GOOG) (GOOGL).
There was also a slew of economic data during the week. Core personal consumption expenditure inflation moderated in December, boosting confidence.
However, manufacturing data continued to point to signs of a slowdown in the economy, with the S&P Global Composite PMI for January showing a contraction in business activity for the seventh consecutive month and the Richmond Fed manufacturing survey for January. it turned out worse than expected.
Meanwhile, the initial estimate of US fourth quarter GDP growth came in stronger than expected but showed a slowdown from the third quarter. Additionally, the number of Americans filing weekly jobless claims hit a nine-month low, which continues to point to resiliency in the job market.
Investors also weighed in on a higher State Street Investor Confidence Index for January, lessening business uncertainty about earnings, a larger-than-expected increase in December durable goods orders and a rise in sales of new homes and pending home sales in December.
Of the 11 sectors in the S&P 500 (SP500), nine finished this week in the green, led by the heavy Consumer Discretionary and Information Technology sectors. Public services and health care were the two losers. See below for a breakdown of weekly sector performance, as well as the corresponding SPDR Select Sector ETFs from the close of January 20 to the close of January 27:
#1: Consumer Discretionary +6.38%and the Select Sector Consumer Discretionary SPDR ETF (XLY) +6.41%.
#2: Information Technology +4.07%and the Technology Select Sector SPDR ETF (XLK) +4.08%.
#3: Communication Services +3.28%and the Select Communication Services Sector (XLC) SPDR Fund +4.12%.
#4: Real Estate +2.82%and the Real Estate Select Sector SPDR ETF (XLRE) +2.88%.
#5: Finances +2.53%and the SPDR Select Financials ETF (XLF) +2.55%.
#6: Industrial +2.13%and the Select Industrial Sector SPDR ETF (XLI) +2.17%.
#7: Energy +0.76%and the Energy Select Sector SPDR ETF (XLE) +0.83%.
#8: Materials +0.71%and the SPDR Materials Select Sector ETF (XLB) +0.75%.
#9: Consumer Staples +0.43%and the SPDR (XLP) Select Consumer Staples Sector ETF +0.33%.
#10: Utilities -0.49%and the Utilities Select Sector SPDR ETF (XLU) -0.49%.
#11: Health Care -0.89%and the Select Health Care Sector SPDR ETF (XLV) -0.78%.
Below is a chart of the YTD performance of the 11 sectors and how they fared against the S&P 500. For investors looking ahead of what’s going on, take a look at Seeking Alpha Catalyst Watch for a breakdown of the actionable events of the coming week that stand out. .
