U.S Sector Breadth: Leaders & Laggards

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Summary of the Sector Breadth Graphic

The graphic displays the percentage of stocks within each S&P 500 sector that are trading above their 20-day Simple Moving Average (SMA). This is a common way to gauge the short-term health and momentum of different sectors. A higher percentage indicates stronger short-term bullishness, while a lower percentage suggests weakness.

Key Takeaways

• Defensive Sectors Leading: Consumer Staples and Utilities are showing the strongest breadth, suggesting investors are favoring defensive positions.

• Weakness in Cyclical Sectors: Technology, Materials, Industrials, Energy, and Communications are all showing extreme weakness. This could be a sign of broader market concerns or sector-specific issues.

• Financials Under Pressure: The Financial sector is also exhibiting significant weakness. 

Sector Breadth Explanation and Ranking

Ranked from strongest to weakest:

1. CNS (Consumer Staples) - 21.05%

   • Explanation: Consumer Staples are showing the strongest breadth, with 21.05% of stocks above their 20-day SMA. This indicates a relatively healthy short-term uptrend within the sector. Consumer Staples are often considered defensive, meaning they may hold up better during market downturns.

2. HLT (Healthcare) - 13.33%

   • Explanation: Healthcare follows as the second strongest sector, with 13.33% of stocks above their 20-day SMA. While not as strong as Consumer Staples, this still suggests a degree of positive momentum.

3. UTL (Utilities) - 12.90%

   • Explanation: Utilities have a similar breadth to Healthcare at 12.90%. Utilities are another defensive sector and often sought for their stable dividends.

4. CND (Consumer Discretionary) - 11.76%

   • Explanation: Consumer Discretionary has 11.76% of stocks above their 20-day SMA. This sector is more cyclical, meaning it's sensitive to economic conditions.

5. REI (Real Estate) - 6.45%

   • Explanation: Real Estate shows weaker breadth at 6.45%. This suggests some short-term bearishness in the sector.

6. TTL (Telecom) - 6.06%

   • Explanation: Telecom has a slightly lower breadth than Real Estate at 6.06%, indicating continued weakness.

7. FIN (Financials) - 1.36%

   • Explanation: Financials are quite weak, with only 1.36% of stocks above their 20-day SMA. This suggests significant short-term bearish pressure.

8. TEC (Technology), MAT (Materials), IND (Industrials), ENE (Energy), COM (Communications) - 0.01%

   • Explanation: All of these sectors are showing extremely low breadth, practically at zero (0.0100%). This indicates significant weakness and bearish momentum.

Ranking Summary (Strongest to Weakest)

1. CNS (Consumer Staples) - 21.05%

2. HLT (Healthcare) - 13.33%

3. UTL (Utilities) - 12.90%

4. CND (Consumer Discretionary) - 11.76%

5. REI (Real Estate) - 6.45%

6. TTL (Telecom) - 6.06%

7. FIN (Financials) - 1.36%

8. TEC (Technology), MAT (Materials), IND (Industrials), ENE (Energy), COM (Communications) - 0.01%

Lester Davids

Analyst: Unum Capital