Which S&P Sectors Will Continue To Gain Post Rate Cut? Or We need more time to see?
After the rate cut announcement on 23 Sep 2024, over the last 4 days, we have seen the S&P 500 Consumer Discretionary sector gained +3.60%, followed by S&P 500 Information Technology sector by +3.26% and S&P 500 Utilities have also went up +2.17%.
So what was the company that are contributing to these gains? And will we continue to see these three sectors to be leading in the coming weeks?
Only S&P 500 Utilities Sector in Leading Quadrant
If we looked at the RRG indicator, we are seeing that both S&P 500 Consumer Discretionary and S&P 500 Information Technology are in the improving quadrant.
So will these two sector move into the leading quadrant as the S&P 500 Utilities, looks like S&P 500 Information Technology is at the edge of the leading quadrant.
If we looked at the S&P 500 sector performance yesterday (25 Sep), the only two sectors are information technology and utilities.
So what are the stocks in these sectors that we can actually look at?
Top 3 Stocks In S&P 500 Information Technology Sector
If we were to look at the stocks in the information technology sector, we might want to see the influencer stocks, like $Apple(AAPL)$ $NVIDIA Corp(NVDA)$ $Advanced Micro Devices(AMD)$
Both NVDA and AMD has risen more than 2% yesterday (25 Sep) and Apple has dropped, so if I were to look at the contributor to the gain in this sector, it would most likely be Nvidia and AMD.
Nvidia has more upside coming its way from what I have seen from the technical analysis, both the MACD and MTF are showing strong upside signal.
MTF has given strong uptrend for Nvidia and this should be coming from the Blackwell production started and market is anticipating when the first shipment would be expected.
Amd is also showing upside from MACD and from the MTF we are seeing the short-term and long-term converging, so there is still more room for upside movement from AMD.
Top 3 Stocks In S&P 500 Utilities Sector
For the utilities sector, the top performer is $Constellation Energy Corp(CEG)$ which has a more than 30%, and it has 6.72%, so this might be why utilities managed to gain on 25 Sep.
But for the energy stocks, if you noticed there have been some influence of the oil price and this might change the performance of this sector.
Top 3 Stocks In S&P 500 Consumer Discretionary Sector
We might need more than Tesla to give a better performance for the consumer discretionary sector, because consumer sentiment data has risen to 69, so we are waiting for consumer to start spending on more luxury brands and products.
But we need to be aware that the rate cut decisions need time to be felt down the system to the consumer in particular.
One of the stocks worth looking at is $Nike(NKE)$ because I believe investors are looking for the new CEO to see what he will do to improve Nike sales strategy, but from the technical analysis, it looks like Nike might not be able to provide more positive gains moving forward, that might drag down the consumer discretionary sector.
With a 2.93% weightage, that is a considerable impact, like Amazon which has the highest weightage and it drag down the gains for Tesla yesterday.
Summary
If we were to look at the S&P 500 sector, I would think information technology and utilities could continue to stay in the green, unless we are seeing a drop in some of the energy prices.
For the information technology sector, I believe the mag 7 and semiconductor stocks should be able to help to power this sector. I am holding to my tech and semiconductor stocks.
Appreciate if you could share your thoughts in the comment section whether you think information technology sector would continue to stay in the green?
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
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