Investors Rotate Towards Risk Free Environment

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as investors rotate towards risk free environment. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Stocks rise slightly, but trade and economy worries persist

Stocks rose on Thursday, regaining some of the losses from the previous session, but the market’s gains were kept in check as worries over the global economy and trade lingered. The Dow Jones Industrial Average closed 43.47 points higher at 25,169.88, led by McDonald’s and Coca-Cola.

The S&P 500 (SPY) inched up +0.21% today. Sector advancers led decliners 8 to 3 as shown below in the sector graph. Communication services (XLC), consumer discretionary (XLY), consumer staples (XLP), healthcare (XLV), industrials (XLI), materials (XLB), real estate (XLRE) and technology (XLK) each had small gains of less than 1%. Energy (XLE) led decliners down with a loss of 1.27%. Financials (XLF) and utilities (XLU) each suffered minor losses of less than 1%.

The Dow Jones index added +43 points (+0.17%) to close at 25,169. The Nasdaq advanced +20 points (+0.27%) to settle at 7,567.

Investors Rotate Towards Risk Free Environment

Stocks rose slightly on Thursday as investors spent the month of May rotating to a risk free environment. Lowering bond yields and an inverted yield curve have raised red flags regarding slower economic growth. Investors flock to bonds when economy concerns appear. When reading the above CNBC article, I came across the following quote, “It definitely points to slower growth. That’s the primary driver right now in this risk-off environment we’ve experienced in the month of May,” said Ryan Nauman, market strategist at Informa Financial Intelligence, about the drop in yields. “People are rotating out of equities and into Treasurys for that defensive play.”

Key Takeaway…

The following CNBC video is a conversation about current market sentiment:

Sentiment overwhelmingly bearish, says Art Hogan

Quincy Krosby of Prudential and Art Hogan of National Securities break down “fear of missing out” versus “fear of not getting out” with CNBC’s “Power Lunch” team.

Notable S&P Movers…

Below I’ve highlighted some notable S&P movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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5/30/19

S&P 500 Sector Graph

S&P 500 (SPY)

Investors Rotate Towards Risk Free Environment

Communication Services (XLC)

Investors Rotate Towards Risk Free Environment

Consumer Discretionary (XLY)

Investors Rotate Towards Risk Free Environment

Consumer Staples (XLP)

Investors Rotate Towards Risk Free Environment

Energy (XLE)

Investors Rotate Towards Risk Free Environment

Financials (XLF)

Investors Rotate Towards Risk Free Environment

Real Estate (XLRE)

Investors Rotate Towards Risk Free Environment

Healthcare (XLV)

Investors Rotate Towards Risk Free Environment

Industrials (XLI)

Investors Rotate Towards Risk Free Environment

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

 

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