Profit Taking From Year End Rally

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map after profit taking from year end rally. 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:

US futures point to a slightly higher open

U.S. stock index futures were slightly higher Monday morning. At around 2:00 a.m. ET, Dow futures climbed 23 points, indicating a slightly higher open of just 2 points. The S&P 500 and Nasdaq indexes were also marginally higher. U.S. equities have enjoyed a strong rally in December, with the main indexes hitting record highs last week amid year-end optimism in markets.

The S&P 500 (SPY) lost -0.58% today. Sector decliners led advancers 10 to 1 as shown below in the sector graph. Communication services (XLC) led decliners down with a loss of -1.04%. Consumer discretionary (XLY), consumer staples (XLP), financials (XLF), real estate (XLRE), healthcare (XLV), industrials (XLI), materials (XLB), technology (XLK) and utilities (XLU) each suffered small losses of less than 1%. Energy (XLE) was the only sector to squeeze out a minor gain of less than 1%.

The Dow Jones index fell -183 points (-0.64%) to close at 28,462. The Nasdaq gave back -60 points (-0.67%) to settle at 8,945.

Profit Taking From Year End Rally

Stocks landed in the red Monday as investors took profits from stocks after a year end rally has pushed the S&P 500 +28.5% (year to date) thru Monday’s close.

“The best-performing Q4 sectors are leading to the downside today, and that implies some short-term selling and people positioning before year-end,” said Tom Essaye, founder of the Sevens Report. “The market was very overbought at the end of last week. Nothing really new has occurred to push the market up in the year-end.”

U.S. equities have enjoyed a strong rally in December, with the main indexes hitting record highs last week amid year-end optimism. The S&P 500 notched five straight weeks of gains, rising 28.5% in 2019 through Monday’s close. The benchmark is within reach of a historic year, sitting about one percentage point away from having its best year since 1997. As it stands now, it will be the best year since 2013.

The South China Morning Post reported Monday Chinese Vice Premier Liu He, the nation’s top trade negotiator, will visit Washington this week to sign the agreement. The newspaper, citing a source briefed on the matter, said the Chinese delegation will stay in the U.S. for a few days until the middle of next week.

Key Takeaways…

I took the following CNBC screenshots today regarding time to fear the cheer, big bounce for banks, classic Santa Claus rally, markets overbought and driving the action:

Notable S&P 500 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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12/30/19

S&P 500 Sector Graph

Profit Taking From Year End Rally

S&P 500 (SPY)

Profit Taking From Year End Rally

Communication Services (XLC)

Profit Taking From Year End Rally

Consumer Discretionary (XLY)

Profit Taking From Year End Rally

Consumer Staples (XLP)

Profit Taking From Year End Rally

Energy (XLE)

Profit Taking From Year End Rally

Financials (XLF)

Profit Taking From Year End Rally

Real Estate (XLRE)

Profit Taking From Year End Rally

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

 

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