Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at the sudden sector rotation in the markets, with investors flocking to value-oriented areas and selling off high-flying technology.
Heavy sector rotation is evident in the marketplace again today as it was during Friday’s session. While we have seen sellers in Technology, there has been buying in Energy and Financials, both of which have been relative laggards lately.
Flight To Value
We mentioned some “value” buying last week as well, specifically in XLP (Consumer Staples) inflows, with over $1.2 billion in creation flows. In contrast, we have seen some trimming in XLK (Technology) with about $300 million leaving the fund.
Top XLK holdings have been blistered in recent sessions, namely, 1) AAPL (15.18%), 2) MSFT (10.42%), 3) FB (6.72%), 4) GOOGL (5.56%), and 5) GOOG (5.41%).
With the VIX rising from below $10 on Friday to above $12 this morning, we have seen August 24 strike call buying in the index, which may be a good indication on where folks are betting volatility will be heading into the summer.
The Consumer Staples Select Sector SPDR ETF (XLP) was trading at $56.58 per share on Monday morning, down $0.09 (-0.16%). Year-to-date, XLP has gained 9.42%, versus a 8.58% rise in the benchmark S&P 500 index during the same period.
XLP currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 of 45 ETFs in the Consumer-Focused ETFs category.