It should. But that would mean US market taking an impact... But I think Energy is the it sector for 2026....//@PorterLamb:Reckon the rally holds, XLE's a solid bet for '26. What do you think? [看涨]
XLE, XLF & XLY - Sectors to invest in 2026 !
@JC888：
The market pendulum swings back to employment this week with a series of new US jobs reports due to be published. Before that, it's a good idea to recap the US economic reports released so far. They reflect the current state of US economy and may have a ripple effect on US stock market, especially when they are less than ideal. New Home Sales. Before US New Home Sales report for September 2025 is out on 13 Jan 2025, enclosed is a recap of what have transpired in 2025. The US Census Board did not get back to reporting after US shutdown ended. For 2025 - January to August as a whole is characterized by choppy growth: (see above) A strong February–April run‑up. A sharp May correction. A flat June–July. And a powerful August snap‑back rather than a smooth, consistent uptrend. Despite the August spike, the broader signal is of a fragile demand environment: Multiple months of weaker YoY sales. Elevated months’ supply near or above 9 months. Frequent evidence that builders relied on price cuts and incentives to move inventory. In short, the first 8 reports of 2025 portray a new‑home market still under pressure from affordability and macro uncertainty. Jobless Claims. (a) Weekly Claims. For week ended 27 Dec 2025, US weekly jobless claims fell by -16,000 claims to seasonally adjusted 199,000 - the lowest since the end of November 2025. (see below) 4 week average was 218,750, still marginally higher than previous week average of 217,000. Economists polled by Reuters had forecast claims would rise to 216,000. It didn’t. US labour market remains locked in what economists and policymakers describe as a "no hire, no fire" mode, and this final report of 2025 was largely emblematic of that. According to Brean Capital, Chief Economic adviser, John Ryding - “the drop in initial unemployment claims to 199,000 in the week of Christmas was likely just another seasonal-adjustment distortion“. Jobless claims - Weekly & Continuing (b) Continuing Claims. For week ended 20 Dec 2025, the number of people receiving unemployment benefits after an initial week of aid, (a proxy for hiring) fell by -47,000 to a seasonally adjusted 1.866 million, the claims report showed. (see above) This proxy for ongoing unemployment eased from recent peaks, with the 4 week moving average dropping to 1.874 million, still up slightly YoY but signaling some stabilization in labour market slack. The decline partially reversed prior holiday-season spikes, underscoring a softening but not collapsing jobs market consistent with tepid growth into year-end 2025. Gross Domestic Product - Q3 2025 (Preliminary) On 23 Dec 2025, the US Bureau of Economic Analysis (BEA) released the initial estimate for US’s Q3 2025 gross domestic product (GDP) report. This is a ‘unique’ report because it served as a "consolidated" release, replacing previously scheduled advance and second estimates that were delayed by the 43-day federal government shutdown. US real GDP growth accelerated to a preliminary 4.3% annualized rate for Q3 2025, surpassing expectations of 3.2-3.3% and building on Q2's 3.8% gain. (see above) The Q3 reading showed that, even in the face of negative consumer sentiment and a softening job market, the roughly $30 trillion economy started October 2025 on relatively solid footing as a whole, outperforming bearish expectations of some experts only months before. Key Drivers. Household / Consumer spending remained the primary engine, rising a robust 3.5% (up from Q2 2025’s 2.5%), fueled by goods and services demand. Exports surged 8.8% while government outlays rebounded 2.2%; rounding off the top 3 drivers. These gains ‘helped’ to offset a residential investment drop of -5.1% and falling imports. Net exports added 1.6% to growth, with final sales to private domestic purchasers—a Fed-watched demand gauge—holding steady at 3.0%. Underlying Weaknesses: Despite the strong headline number, the report highlighted a widening gap between production (GDP) and income (GDI), where Real GDI grew at a much softer 2.4%. With residential investment contracted for the 2nd straight quarter (-5.1%), it reflects a housing market still paralyzed by (a) high borrowing costs and (b) limited inventory. Consumer Confidence. The December 2025 Conference Board Consumer Confidence Index fell -3.8 points to 89.1 from an upwardly revised November 2025’s 92.9. This is the lowest level for the index in the past 8 months and puts the index in the 34th percentile of the data series. Latest reading was also lower than the forecast of 91.7. The Present Situation Index, that is based on consumers' assessment of current business and labor market conditions, fell -9.5 points to 116.8. While the Expectations Index, that is based on consumers' short-term outlook for income, business, and labor market conditions, held steady at 70.7. Note : A level of 80 or below for the Expectations Index historically signals a recession within the next year. The Expectation Index has been below 80 since February 2025. Unemployment Rate. On 16 Dec 2026, US’s November unemployment rate increased to a 4-year high of 4.6%. Economists have partly attributed the rise because of technical factors related to the 43-day government shutdown. Excluding the pandemic, November’s 4.6% reading was the highest since late 2021. This triggered anxiety among analysts as the 12-month rise approached 0.5 percentage points, the threshold for the Sahm Rule, a historically reliable recession indicator. Will December 2025 unemployment report (due on 9 Jan 2026) continue to rise or dip marginally ? Looking Ahead - My viewpoints: (mine only) Looking at above US economic reports - ranging from high-frequency labour data to broad economic growth and housing activity, they paint a picture of a US economy that is still structurally sound but cooling under the weight of external shocks. Layered with geopolitical stress of US military action in Venezuela on 03 Jan 2026, the outlook for US’s Q1 2026, shifts from a steady soft landing to a period of heightened volatility, I feel. How So ? (1) Disregard Q3 2025 data. Well, firstly US’s Q3 2025 - GDP was a massive upside surprise coming in at 4.3%. On closer examinaion, it is essentially "old & outdated” news - reflecting a pre-shutdown, pre-conflict surge. Most analysts expect a sharp "downshift" in Q1 2026 GDP as the 43-day government shutdown's ripple effects finally hit the ledgers, likely dragging growth down toward 1.8% – 2.0%. (2) Fiscal Burden. A prolonged military occupation or "stabilization" effort in South America will increase federal spending, piling onto US national debt that is already $38.57 trillion and counting. (see below) While defense spending technically boosts GDP, it (a) crowds out private investment and (b) adds to the national debt, that could push Treasury yields even higher. (see below) Both US Treasury Yields for 10 years and 30 years have been rising steadily since mid-October 2025 The "War Premium": As of 6 Jan 2025, the capture of Venezuela’s leadership is being viewed by bond markets as an inflationary event. The initial military success prompted a safe-haven bid (buying bonds, lowering yields). But (a) resulting spike in oil prices and (b) cost of military occupation are now pushing long-term yields back up. US Market Impact. In the next 3 months, US stock market will likely experience heightened volatility. This as it balances the friction of a slowing labour market and high long-term yields against the inflationary pressures and increased defense spending triggered by the military intervention in Venezuela. All these will keep US equities (i) range-bound and (ii) sector-specific over the next 3 months easily. Where To Invest ? Given the geopolitical shockwaves and the structural shift in US economy observed since late December 2025, Wall Street institutions have pivoted their recommendations to account for a "New Era of Volatility". Consensus for Q1 2026 focuses on a "barbell strategy": Defensive positioning in Energy and Military sectors. (see below) On 05 Jan 2026, oil stocks prices have surged big time - eg. Chevron: +5.10%, ConocoPhillips: +2.59%, $Halliburton(HAL)$ +7.84% etc… Military stocks as well eg. $General Dynamics Corp(GD)$ +3.54%, Lockheed Martin +2.92%. Paired it with highly selective exposure to high-growth AI and software. The magnificent 7 - AI stocks have surged too. eg. $Amazon.com(AMZN)$ +2.90%, Meta Platform Inc +1.29%. In summary, the top 3 performing sectors in the first full week of trading for 2026 are: (see below) Are they really stable ? (1) $Energy Select Sector SPDR Fund(XLE)$. Moving Averages. XLE exhibits a strong bullish configuration across the 3 timeframes. Current price is trading above its 20-day, 50-day, and 200-day moving averages, all of which are trending upward. A significant "Golden Cross" occurred in late 2025. Lastly, current price remains well-supported by these rising averages, signaling robust long-term momentum. MACD The MACD provides a positive signal, as the MACD line (0.14) remains above the signal line (-0.03). It also resulted in positive divergence of 0.17 that indicates a bullish crossover. Histogram reflects accelerating buying pressure following the recent geopolitical events in early January 2026. RSI The 14-day RSI for XLE is currently reading approximately 65.02 (as of 05 Jan 2025). It is showing relatively strong bullish momentum, but it is not yet in classic “overbought” territory, that is usually defined as RSI above 70. Chart Formation. XLE has recently broken out from a 2-year horizontal consolidation range (where ETF has been priced roughly between $37 & $49) that has persisted since early 2023. The "rectangle" or "base-building" formation is technically significant, as the length of the consolidation often precedes a powerful and sustained upward move. Wall Street anticipates a bullish but volatile trajectory for XLE over the next 3 months. While the breakout from the 2-year range sets a technical price target near $51–$53. (2) $Financial Select Sector SPDR Fund(XLF)$. Examples of XLF - JP Morgan Chase +2.63%, Visa Inc +2.11% Moving Averages (MA). The XLF is maintaining a long-term bullish posture as it trades above its rising 200-day MA ($51.84). In the medium-to-short term, the price is successfully holding above both the 50-day ($53.47) and 20-day ($54.81) moving averages. MACD. The MACD and its signal line (EMA 9) are identical at 0.60, resulting in a zero divergence that indicates a momentary pause or "stall" in momentum. While both values remain above the zero line that is a sign of underlying bullish strength - a lack of separation suggests the price is currently consolidating rather than trending. The neutral state often precedes (a) a decisive breakout or (b) a reversal, depending on upcoming volume and market catalysts. RSI. XLF’s 14-day RSI currently sits at 68.08, placing it in neutral territory. Data is considered “healthy” as it suggests the ETF is neither overbought nor oversold, providing enough "room" for further upward movement without immediate exhaustion. Chart Formation. XLF has been moving within a broadening ascending channel. It also means a series of “higher highs and higher lows” throughout 2025. This pattern reflects a steady "melt-up" characterized by rotation into value and banking stocks rather than a sharp explosive breakout. Formation shows strong support near $53.00 level and resistance at recent $55.89 high. Wall Street analyst anticipates a steady upward trajectory toward the $58.00–$60.00 range over the next 3 months. While high interest rates may pressure some segments, the "higher-for-longer" yield environment generally benefits the net interest margins of major bank holdings like JPMorgan Chase. US Financial sector to remain a primary beneficiary of the "barbell strategy" mentioned in earlier reports, leading the market as a stable, defensive growth play. Consumer discretionary (XLY) Examples of XLY : Tesla +3.10%, Nike +1.10% Moving Averages (MA). As of 5 Jan 2026, XLY is trading near $119.90, placing it in a precarious position relative to its key averages. It is trading below its 20-day ($120.65) indicating short-term bearish pressure. It remains above its mid & long-term MA of 50-day ($118.78) and 200-day ($111.47), indicating that while immediate trend is weak, the broad primary uptrend from 2025 has not yet been fully broken. MACD. The MACD line (0.39) is trading significantly below its signal line (0.77), resulting in a negative divergence of -0.38. The "bearish” crossover indicates that short-term momentum is fading rapidly, as the faster moving average is dropping toward the zero line much quicker than its historical average. A widening ‘negative’ divergence suggests selling pressure on XLY is intensifying and latest downward trend is likely to persist in the near term. RSI. With 14-day RSI at 31.9, XLY is near the oversold threshold of 30. This indicates that the recent sell-off has been aggressive. While it confirms a bearish near-term outlook, it also hints that the sector may be due for a "dead-cat bounce" or a relief rally as it becomes technically "too cheap" in the short term. Chart Formation. XLY has over the past 12 months has formed a broad horizontal trading range or a potential Double Top near the $123 level. After peaking in late December 2025, the price failed to sustain a breakout and has since pulled back toward the lower end of its range. This pattern reflects a market that is struggling to push higher due to the cooling consumer sentiment and high borrowing costs mentioned in your reports. In the near term, analysts anticipate a sideways-to-bearish trajectory for XLY. ETF price will likely test support near $114–$115. Given heavy weight of TSLA and AMZN in the ETF, the sector will likely face continued volatility as it balances high-growth AI potential against the "softening job market" and "negative consumer sentiment." Until the RSI stabilizes and the price climbs back above the 50-day moving average, the outlook remains cautious. Coming Week’s Reports. Will US economic reports out this week, play havoc on US market ? Mon, 05 Jan - ISM manufacturing report (December 2025). Tue, 06 Jan - S&P final US services PMI (December 2025). Wed, 07 Jan - Jobs opening and Labour turnover surveys (JOLTs) - November 2025. Wed, 07 Jan - ADP non-farm payroll (December 2025). Thu, 08 Jan - US jobless claims - Weekly (03 Jan 2026) & Continuing (27 Dec 2025). Thu, 08 Jan - US trade deficit (October 2025). Fri, 05 Sep - US non-farm payroll (December 2025). As of 7 Jan 2026 - 247 trading days remain, including 3 half-days ending at 1 PM ET. I will not rush to trade but carefully plan entries and exits. What about you ? Remember to check out my other posts. (See below). Help to Repost ok, Thanks. GOOG Rises To $5 Trillion In 2026 ? Possible ? TSLA Falls Further From $438 Price Tag ? QBTS Quantum Sparks on January 2026 ? Do you think US market will continue to rally in 2026’? Do you think the 3 sectors mentioned are worthy investment considerations in 2026 ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents
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