Sector Winners and Losers week ending 1/15

The sectors had a wild race this week with the backdrop of a up and down market with several rotations between small caps, mid caps and large caps.

Energy (XLE) would ultimately be the winner, supported by production cuts in Saudi Arabia, higher than expected demand for oil, and some positive news from OPEC. There was a significant pullback on Friday after SEC announced an investigation into Exxon Mobile (XOM) which makes up 23% of the XLE ETF.

Financials (XLF) led must of the week as investors expect higher treasury yields boost performance for big banks. That turned upside down on Friday when Citigroup (C) and Wells Fargo (WFC) disappointed on revenue despite beating expectations on earnings.

It was Real Estate (XLRE) and Utilities (XLU) that started to climb on Tuesday and were top performers on Friday. Those two sectors are defensive plays for equity investors. Both are expected to suffer less from market pullbacks.

Materials (XLB) and Industrials (XLI) were also doing well earlier in the week, but pulled back on Friday. It could be that the nearly $2 trillion of stimulus promised by President-elect Biden is seen as a delay to the expected investments in infrastructure. Just a theory.

Technology (XLK) and Communications (XLC) were at the bottom. The big tech mega-caps went up and down in price all week as money moved in and out of the segment. Communications, which includes companies like Facebook (FB) and Twitter (TWTR) suffered the most as investors fear negative impact of recent actions related to Donald Trump.