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SPY Component Sectors Ended in Positive Territory to Start November

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SPY advanced 1.18%

The SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P500 Bull 3X ETF (SPXL) rose 1.18% and 3.52%, respectively, on Monday, November 2, 2015. The trailing one-month return for SPY was 7.89% as of November 2. The day turned out to be bright for US equities in the wake of the release of some important economic indicators.

The following graph shows the performances of the component sectors of the SPDR S&P 500 ETF (SPY). Except for the real estate sector, every sector of SPY climbed on November 2.

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Economic overview

The Gallup US Consumer Spending Measure for October 2015 came in at $92, above the prior month’s level of $88. This measure excludes home purchases, automobiles, and household bills. It is correlated with the consumer discretionary sector and caused a rise in that sector.

The Purchasing Managers’ (or PMI) manufacturing index came at 54.1 for October 2015. This index was in line with the consensus forecast and above the prior reading of 53.1. This report indicates positive growth in manufacturing activity, lifting stocks in the industrial sector and the material sector.

The ISM manufacturing index reached 50.1 for October 2015, slightly above the expected 50.0 reading. Although this reading is just above the threshold level of 50, below which the reading implies contraction, this report beat analyst expectations.

Construction spending

Construction spending for September 2015 came in at 0.6%, beating the consensus estimate of 0.4%. Although the report looked solid, the reading was lower than the prior monthly change reading of 0.7%. This is anticipated to have taken the real estate sector opposite to the broad market movement. Overall, the economic reports were upbeat, leading to an upswing in all the sectors of SPY.

The energy sector was at the lead with the Energy Select Sector SPDR ETF (XLE) gaining 2.34% on the day. Stocks of Consol Energy (CNX), Diamond Offshore Drilling (DO), and Ensco (ESV) returned 17.4%, 11.2%, and 8.0%, respectively, on November 2.

In the next part of this series, we’ll look at the other market aspects from Monday, November 2.

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