The pieces of the next bull market are starting to come together

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Thursday, November 17, 2022

Today’s newsletter is at Jared Blickre, a market-focused reporter on Yahoo Finance. Follow him on Twitter @SPYJared. Read this and more market news going on Yahoo Finance App.

US stocks fell on Wednesday, raising concerns that the bear market is unlikely to end anytime soon. But some sectors have outperformed the wider market and have the eye of investors.

A look at the performance of the S&P 500 sectors since the broader market bottomed out in mid-October.

S&P 500 Sector Performance

Cyclical and value sectors dominate, as industrials and materials rise higher – up around 14% in both sectors. Financials and energy — the only sector up to date year to date — are close behind. All are up more than 10%.

Looking within the top sectors, the stronger names emerged over the summer. As the broader market has been making recent lowers, many of these stocks have held and even broken even.

Industrial Stocks and Materials

Industrial Stocks and Materials

Freeport material stock (FCX) leads this group, having easily surpassed recent highs and climbed into June price territory. Caterpillar (CAT) – up 30% in the past month – is heading for its highest level since mid-2021. Even under siege Boeing (BA) surpassed its August high in the past few days.

The top performers in the remaining sectors – technology, real estate, and utilities – have gained more than 9% in the past month. Many of the technological gains can be found in semiconductors, and to a lesser extent, in software.

Semiconductor Industry Stocks - 1 Month Returns

Semiconductor Industry Stocks – 1 Month Returns

Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) just dipped its toe into a chip, buying Taiwan Semiconductor (TSM) in the third quarter. When a high-value investor decides it’s time to load up on a highly cyclical growth name in the semiconductor sector, investors pay attention.

No one knows what the coming weeks will bring, but the pieces of another bull market are starting to align – and it’s time for investors to pay attention.

What To Watch Today

Economy

  • 8:30 am AND: Getting Started with HousingOctober (1.411 million expected, 1.439 during the previous month)

  • 8:30 am AND: Building PermitsOctober (1.515 million estimated, 1.564 million during the previous month, revised upwards to 1.696 million)

  • 8:30 am AND: Getting Started with Housingmonth over month, October (-2.0% expected, -8.1% during the previous month)

  • 8:30 am AND: Building Permitsmonth on month, October (-3.2% expected, -1.4% during the previous month)

  • 8:30 am AND: Philadelphia Fed Business Outlook IndexNovember (-6.0 expected, -8.7 during previous month)

  • 8:30 am AND: Jobless Start Claimsthe week ending November 12 (228,000 expected, 225,000 during the previous week)

  • 8:30 am AND: Continuing Claimsthe week ending 5 November (1.510 during the previous week)

  • 11:00 am AND: Kansas City Nutritional Manufacturing ActivityNovember (expected -8, -7 during previous month)

Earnings

  • Alibaba Group (BABA), Wholesale BJ (BJ), Dole (DOLE), Farfetch (FTC), gap (GPS), Kohl on (KSS), Macy’s (M), Palo Alto Networks (PANW), Ross Stores (ROST), Children’s Place (PLCE)

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