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- The S&P 500 benchmark ETF SPDR S&P 500 Trust ETF (NYSEARCA:SPY) is heading for its fourth-down close as the ETF is -6.8% YTD and has touched a three-month trading low.
- Ten of the eleven S&P 500 sectors are in the red for 2022, led by the technology, consumer discretionary, and real estate sectors down 10.4%, 10.3%, and 9.1%, respectively. The energy segment is the only bright spot as the space is +13.3% in 2022. Below is a breakdown of all eleven S&P 500 sectors YTD.
Energy
- The energy sector is +13.3% YTD, and the Energy Select Sector SPDR ETF (NYSEARCA:XLE) is +14.8% on the year.
- Supporting the moves in energy stocks and ETFs is the rising prices of oil. Crude has now touched a 7-year high and is up 60% over the past year, now touching $84.50/bbl.
Consumer Staples
- This market segment is -0.57% YTD, and the Consumer Staples Select Sector SPDR ETF (NYSEARCA:XLP) is -1.57%.
- Market sentiment has shifted towards a risk-off mode as the year kicks off, and investors are heading towards stocks that can provide strong demand and pricing power.
Financials
- Financials are -1.21% this year, and the Financial Select Sector SPDR ETF (NYSEARCA:XLF) is -0.13%.
- Financials came out of the gates hot to start the year but have since cooled off as most banks dropped after Q4 earnings season kicked off with some road bumps from big names.
Utilities
- The utility sector is -3.5%, and the Utilities Select Sector SPDR ETF (NYSEARCA:XLU) is -3.6%.
- Utilities are modestly in the red but find themselves as the fourth best performing sector. Investors look to get defensive and look towards President Biden's decarbonization goals, which could triple U.S. reliance on its power grid.
Industrials
- The fifth best S&P 500 sector are industrials, which are -3.6%. The Industrial Select Sector SPDR ETF (NYSEARCA:XLI) is -3.4%.
- Many industrial stocks find themselves in the value segment of the market. While experiencing selling pressures, they appear to be better choices than high-growth names and can still provide investors with quality opportunities.
Materials
- Materials are -5.9%, and the Materials Select Sector SPDR ETF (NYSEARCA:XLB) is -4.9%.
- Materials have seen a dip from the beginning of the year as certain headline material sector stocks have been downgraded.
Health Care
- The health care segment is -7.5% in 2022, and the Health Care Select Sector SPDR ETF (NYSEARCA:XLV) is -7.1%.
- The health care sector has been one of the underperformers in 2021 and starts the year off in a continuous fashion. COVID-19 makers have dipped as health officials question the need for Omicron-specific shots.
Communication Services
- Communications is -7.5% YTD, and the Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) is -3.7%.
- Communication stocks are the eighth-worst performing sector, led by catalyst FAANG names.
Real Estate
- Real Estate is -9.1% in 2022 and the Real Estate Select Sector SPDR ETF (NYSEARCA:XLRE) is -9.4%.
- Real Estate finished 2021 as a top-performing area but is off to a difficult start as the rate-sensitive sector is anticipating multiple Fed rate hikes this year.
Consumer Discretionary
- Consumer Discretionary is -10.3% and the Consumer Discretionary Select Sector SPDR ETF is -9.1%.
- The sector is the second worst-performing segment, led by mega-cap names and a rotation away from high valuation names.
Information Technology
- The technology space is -10.4% in 2022, and the Technology Select Sector SPDR ETF (NYSEARCA:XLK) is -9.5%.
- The tech sector has been the worst-performing sector as the Nasdaq dips below its 200-day moving average and enters correction territory.
Conclusion
- The stock market continues to trade lower as cash rotates to defensive stocks. Moreover, six of 11 S&P sectors are trading higher.