The S&P 500 (SP500) on Friday added 2.67% for the week to end just a hair below the 4,000 points mark. The advance extended the benchmark index’s positive start in the new year to a second straight week of gains. Its accompanying SPDR S&P 500 Trust ETF (NYSEARCA:SPY) rose 2.70% for the week.
After a relatively quiet first half of the week, Thursday and Friday saw significant events in the form of the latest Consumer Price Index report and the start of bank earnings, respectively.
The CPI report showed an expected moderation in inflation, pointing to signs that the Federal Reserve’s aggressive interest rate hikes were finally cooling the economy and buttressing expectations of a smaller 25 basis point hike at the central bank’s meeting in February.
In other economic data, sentiment was also helped after the University of Michigan’s reading of January consumer sentiment climbed. The data also showed an easing in short-term inflation expectations. Additionally, investors parsed a fall in weekly jobless claims, a rise in the Atlanta Fed’s January business inflation expectations and an unchanged investor movement index score.
The week saw the start of the fourth quarter earnings season with quarterly results from major banks including JPMorgan (JPM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC). Most of the banks beat estimates on earnings and revenue, while also reporting a rise in expenses and provision losses and issuing warnings about the financial environment ahead. UnitedHealth (UNH) and Delta Air Lines (DAL) were among the other big companies to report their results during the week.
Next week will see earnings from companies such as Goldman Sachs (GS), Morgan Stanley (MS), United Airlines (UAL), Procter & Gamble (PG) and Netflix (NFLX).
Of the 11 S&P 500 (SP500) sectors, nine ended this week in the green, led by heavyweight sectors Consumer Discretionary and Information Technology. Defensive sectors Consumer Staples and Health Care were the two losers.
See below a breakdown of the weekly performance of the sectors as well as their accompanying SPDR Select Sector ETFs from Jan. 6 close to Jan. 13 close:
#1: Consumer Discretionary +5.76%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) +5.78%.
#2: Information Technology +4.60%, and the Technology Select Sector SPDR ETF (XLK) +4.62%.
#3: Real Estate +4.39%, and the Real Estate Select Sector SPDR ETF (XLRE) +4.44%.
#4: Materials +4.29%, and the Materials Select Sector SPDR ETF (XLB) +4.26%.
#5: Communication Services +4.07%, and the Communication Services Select Sector SPDR Fund (XLC) +3.87%.
#6: Energy +2.66%, and the Energy Select Sector SPDR ETF (XLE) +2.73%.
#7: Financials +2.03%, and the Financial Select Sector SPDR ETF (XLF) +2.12%.
#8: Industrials +1.53%, and the Industrial Select Sector SPDR ETF (XLI) +1.54%.
#9: Utilities +0.45%, and the Utilities Select Sector SPDR ETF (XLU) +0.46%.
#10: Health Care -0.19%, and the Health Care Select Sector SPDR ETF (XLV) -0.16%.
#11: Consumer Staples -1.46%, and the Consumer Staples Select Sector SPDR ETF (XLP) -1.37%.
Below is a chart of the 11 sectors’ YTD performance and how they fared against the S&P 500. For investors looking into the future of what’s happening, take a look at the Seeking Alpha Catalyst Watch to see next week’s breakdown of actionable events that stand out.