The S&P 500’s big jump amid last week’s “epic rallies” for stocks and bonds was driven in part by interest-rate-sensitive sectors that widened the index’s gains, setting it on track to rise through the end of the year, according to Yardeni Research.
“All 11 sectors posted gains last week, and many enjoyed their best week in nearly a year,” Yardeni analysts, led by the firm’s president and chief investment strategist Ed Yardeni, said in a note on Monday. “We believe the stock market correction is over and the S&P 500 is back on track to end the year at 4,600.”
US stocks fell on Monday afternoon, with the S&P 500 index falling slightly to around 4,353 after last week posting its biggest weekly percentage gain since November 2022. After a group of seven so-called big technology stocks fueled the S&P 500’s rise in… In 2023, investors are watching for any signs of the market gauge widening as it moves higher.
“The decline in bond yields boosted the valuation multiples for technology stocks as well as traditional interest rate-sensitive stocks,” Yardeni analysts said of last week’s rise.
Real estate was the best-performing sector on the S&P 500 last week, rising 8.5%, while financials and consumer discretionary stocks had the next biggest gains, the company’s note showed.
How the S&P 500 sectors stacked up last week
| Standard & Poor’s 500 sector | %performance |
|
Real estate |
8.5 |
|
Finance |
7.4 |
|
Consumer Dictionary |
7.2 |
|
information technology |
6.8 |
|
Telecommunications Services |
6.5 |
|
Industries |
5.3 |
|
Services |
5.2 |
|
Material |
5.1 |
|
health care |
3.5 |
|
Consumer Goods |
3.2 |
|
energy |
2.3 |
|
Source: Yardeni research note |
is reading: Home construction ETFs rose, outpacing the Dow Jones’ big gains
The US stock market’s broad jump last week was led by the S&P 500 SPX,
The Dow Jones Industrial Average (DJIA) and Nasdaq Composite got off to a strong start to November, after the indexes declined in the previous three consecutive months.
“From August to October, investors were spooked by the jump in the 10-year US Treasury yield from 3.96% on July 31 to 5.00% a week ago,” Yardeni analysts said.
US stock prices rose broadly last week as Treasury yields fell, with the interest rate on the 10-year Treasury note seeing its biggest weekly drop since March to end Friday at 4.557% based on 3pm ET levels, according to Dow Jones Market Data. . .
Last week’s “epic” rally in the bond market sent the 10-year Treasury yield down to a more comfortable distance of 5.00%, Yardeni analysts wrote. The move, they said, “was supported by modestly bullish economic news that appears to have sparked a spike in short covering by bears and panic buying by bulls.”
The 10-year Treasury yield BX:TMUBMUSD10Y was trading higher on Monday, at about 4.65%, according to FactSet data, at last check. Bond yields and prices move in opposite directions.
Meanwhile, “the stock market appears to be following the classic seasonal scenario of year-end weakness in September and October, setting the stage for a Santa Claus rally,” according to analysts.
be seen: Dow Jones records best week since October 2022 as stocks rise after soft jobs report
The S&P 500 rose 5.9% last week, with its real estate stocks XX:SP500.60,
Financials XX: SP500.40,
Consumer Choice XX:SP500.25,
The Technology XX:SP500.45 and Communications Services XX:SP500.50 sectors outperformed the broader index during the same period.
Big tech companies in 2023
Meanwhile, the best-performing sectors on the S&P 500 so far in 2023 are communications services, technology and consumer discretionary, each with huge double-digit gains.
Big Tech stocks, which include seven giant companies located in all three of these sectors, have a heavy weighting in the S&P 500.
Nvidia chipmaker nvidia,
It has the biggest gains ever among big tech stocks in 2023. Shares of the tech company, which has a market value of more than $1 trillion, have risen more than 208% so far this year as of Monday afternoon trading, according to FactSet data.
The next biggest stock gain of 2023 in the Big Tech group is from Meta Platforms Inc., META, the parent company of Facebook.
Which rose by about 162%, followed by Tesla. TSLA,
whose shares rose by about 75%, and then AMZN, a subsidiary of Amazon.com,
A jump of about 66%, according to FactSet data, at last check.
But real estate and financial companies, the two biggest sectors in the S&P 500 rising last week, remain lower so far in 2023, with each sector lower on Monday afternoon. By contrast, the S&P 500 is up more than 13% this year based on afternoon trading levels.
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