Weekend Best And Worst Report
Top scoring weekly returns: Buy and Hold 1 Year
Healthcare moves into the top slot this week, followed by basic materials and financials. In healthcare and basic materials, concentrate on large and mid cap, rather than small cap.
Technology and utilities score in line with the average score across our 1,800 stock universe. Technology has been slowly moving up our ranking over the past four weeks.
Consumer goods, services, and industrial goods score below average -- stay industry and stock specific in these groups until scores improve.
The following chart visualizes score by market cap and sector.
This next chart shows historical four, eight, and 12 week moving average scores since 2010.
Healthcare
The top scoring sector across our stock universe is healthcare. Healthcare offers neutral seasonality through October. Over the past 10 years, the XLV has finished October higher than it begins August six times, returning a median 2.51% (below the 3.95% average return for the SPY).
That said, healthcare offers solid absolute returns through year end. Over the last decade the healthcare ETF (XLV) has posted average monthly gains in September, November, and December. This suggests that the basket will perform solidly into quarter end before providing a strong buy opportunity in October ahead of a run into the end of the year -- position accordingly.
Biotech follows a similar path though year end. Over the last ten years, the IBB has been a strong performer in the final month of the third quarter, paused in October, and then gained ground into year end.
Basic Materials
Basics offer seasonal tailwinds through October given that the XLB has finished the 3-month period higher in seven of the past 10 years, returning a better than market median 4.34%. However, basics (XLB) standard deviation is higher than healthcare (XLV).
Financials
Financials also offer solid seasonality through October; however, median returns trail the SPY. REITs and banking score best.
Top Scoring
Disclosure: None.