Sector Winners and Losers for 1/5 and 1/6I normally publish this chart on weekly basis as part of my Week in Review work but I thought it was interesting to look at it today, in the context of the Georgia run-off election results. There is also the turmoil in DC, but that did not seem to impact the sector leaders list (the afternoon dip impacted all equally).
Energy (XLE) is leading over the two days, although was in third place for Wednesday. This position is not related to politics, but rather that crude oil prices moved past $50 for the first time since February. A much smaller part of Energy is the solar stocks which will benefit greatly from a Democratic controlled congress and presidency. However, the solar stocks make up a small part of XLE and are not the reason for the sector performance.
Materials (XLB) is the next sector on the list. Materials sector will benefit greatly from expected spend on infrastructure in the US.
Financials (XLF) was the winner on Wednesday, as yields on treasury bonds rose, bringing higher interest rates that will benefit banks.
Industrials (XLI) got a boost from both the outlook for infrastructure spend, but also the promise of more stimulus that would easily pass through congress and signed by the president.
The sectors that did not fair well with the news included Communication Services (XLC) and Technology (XLK) which both include "big tech" names that are likely to take a hit from higher bond yields. Similarly Real Estate (XLRE) will incur higher costs due to the higher interest rates.
