If you ever played the video game NBA Jam, you are no doubt familiar with the point in the game where a player would start to shoot so well that their hands would literally catch on fire. It was at that point that the player could temporarily shoot from anywhere on the court and the ball would go in accompanied by the announcer shouting, “He’s on fire!” In the market right now, the Industrials sector is on fire. While the various groups within the sector have seen mixed returns on a YTD basis, over the last week they have all traded higher. Besides the Energy sector, where there are just two industries, no other sector has seen every industry within it trade higher over the last week
The graphic below is from our S&P 500 Industry Performance Matrix which summarizes the performance of the S&P 500’s 60+ Industries showing each one’s weight in the S&P 500, its performance over various time periods, and the performance of its most heavily weighted stocks. In the charts to the right of each industry, we show where each group currently sits with respect to its one-year range (circle) as well as where it was a month ago (red or green tail). When the circle and tail are red, it indicates that the group has traded lower in the last month, while green indicates groups that have traded higher.
In the case of the Industrials sector, it’s practically all green across the screen with six out of the twelve industries trading at or right near 52-week highs. Some of the strongest performers over the last week have been Professional Services, Airlines, Road & Rail, Construction & Engineering, Trading Companies, Building Products, and Industrial Conglomerates. All seven of these groups are up at least 2% in the last week and in the case of Professional Services, as much as 3.5%. On top of that, while Aerospace & Defense, the sector’s largest group, hasn’t exactly been a leader in the last week, it is still up over 25% on the year driven by a 63% gain in Boeing (BA).
The recent gains in the Industrials sector have been a great change of pace for a sector that for much of the year hadn’t really been a market leader. Like the hot players in NBA Jam, you can only stay “On Fire” for so long.
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