Industrial Sector Continues To Lead US Stock Rally In 2019

Industrial companies remain the strongest-performing sector for the US stock market year to date, based on a set of exchange-traded funds. Although all the major equity sectors are posting gains so far in 2019, industrials are holding on to a first-place finish as of trading through yesterday’s close (Mar. 11).

Industrial Select Sector SPDR (XLI) is up 16.3% in 2019. The ETF’s performance is modestly ahead of the second-strongest sector advance via Technology Select Sector (XLK), which is ahead by 15.1%.

XLI’s leading return this year is all the more impressive when you consider that the ETF’s top holding is Boeing (BA), which has fallen sharply in the wake of news that several countries have suspended operation of the firm’s 737 Max aircraft, which suffered a second fatal crash in less than five months on Sunday.

The weakest sector performer this year is health care. Health Care Select Sector SPDR (XLV) is up a comparatively modest 4.5% year to date.

The stock market overall continues to post a strong year-to-date return, based on an ETF proxy. SPDR S&P 500 (SPY) is up 11.4% through Monday’s close.

Reviewing sector ETF performance through a technical lens as a proxy for momentum reveals that only four funds are currently posting relatively strong upside biases, based on comparing a set of moving averages. By that score, real estate (XLRE) and utilities (XLU) are red hot, based on 50-day averages well above 200-day averages. Note, too, that both funds closed at new highs yesterday.

The 50-day averages for health care (XLV) and consumer staples (XLP) also closed above their 200-day averages on Monday, but just barely, suggesting that positive momentum is relatively fragile for these ETFs at the moment vs. XLRE and XLU.