ETFs and the Health Care Sector: A New York Perspective

When it comes to exchange-traded funds (ETFs) representing health care, energy, materials, and real estate sectors, there’s a distinctly Big Apple way to dissect recent performances. Brace yourselves.

Trouble in the Neighborhood: Sector Weakness

The performance charts of these sector-specific ETFs aren’t painting the rosiest picture. Take health care, for instance. The Health Care Select Sector SPDR Fund (NYSE: XLV) just hit a new low, $136, on Thursday, thanks to heavy trading. While it rebounded on Friday, the dreaded crossover has occurred: the 50-day moving average dipped below the 200-day moving average for the first time. Ouch.

One can trace some of XLV’s misery back to its own back yard. Folks, this ETF holds 61 health companies with big guns like Eli Lilly, UnitedHealth Group, and Johnson & Johnson. Add in the recent tragic shooting of UnitedHealth’s CEO, Brian Thompson, and you’ve got a perfect storm causing waves across the entire health insurance industry.

Energy Faces a Slippery Slope

Over in the energy sector, Energy Select Sector SPDR Fund (NYSE: XLE) isn’t faring much better. Friday saw the trading range dip down to early September lows. Anyone who’s had a stake in this fund knows a drop from November’s $98 down to $84 is no joke— and a serious 14.28% hit. With oil prices unable to stage a comeback, profit expectations are decidedly damp.

But who steers this ship? With 22 holdings, Exxon Mobil leads the pack with a 21% stake, followed by Chevron at 15% and Conoco Phillips holding steady with a 7.99% share.

Materials: Steady Sinking

As for the Materials Select Sector SPDR Fund (NYSE: XLB), it’s been sliding on the same grease from a near $98 high in October to a recent $85 close. That’s a swift 13.26% two-month slump, head-spinning in anyone’s ledger book.

This fund, holding 28 stocks, is built around heavyweights like Linde at a 17% weight, Sherwin Williams with 6.95%, and Air Products And Chemicals at 5.7%. The chemical sector dominates, comprising 63% of the fund’s overall holdings.

The Real Estate Quandary

Then, there’s real estate—the Real Estate Select Sector SPDR Fund (NYSE: XLRE). Its recent chart doesn’t need an NYTimes crossword to decipher: no major new lows, but it’s still not exuding confidence. Thursday’s action took it below the 200-day moving average, though Friday’s rally barely nudged it back.

It holds 31 real estate investment trusts, with Prologis holding a hefty 9.21% share. Topping the list are Equinix at 8.59% and American Tower with 8.22%. Should interest rate cuts stop as the Fed suggests, buckle up—this fund’s natural habitat is right in the crosshairs.

Whether your dollars take you to Wall Street or the West Coast, these sectors spell unpredictability in various dialects. As always, more in-depth analysis is available at johnnavin.substack.com.

Looking towards the horizon, these ETFs may either come back stronger or continue to see volatility, much like New York itself—always changing and never dull. So keep your wits about you and your portfolios tuned.