Brooke Thackray, research analyst, Global X
FOCUS: Seasonal investing and technical analysis
Top Picks: Technology Select Sector SPDR Fund, Global X Gold ETF, iShares Russell 2000 ETF
MARKET OUTLOOK:
The stock market has rallied from early November when Donald Trump was elected as the U.S. president. Some of the sectors that have rallied have been the same sectors that rallied after Trump was elected in 2016, but there has not been the same magnitude of upward trends. Is the Trump bump over?
The situation today is very different compared to 2016-17. In addition to tax cuts and reduction of regulations, which are expected to stimulate the economy, Trump is proposing to reduce government spending and the number of employees. In the short-term, this will have a dampening effect on the economy and the stock market. Due to the battling narratives, investors should expect a “lumpy” experience in the stock market in 2025.
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TOP PICKS:
The Technology Select Sector SPDR Fund (XLK NYSEARCA)
The technology sector has been underperforming the S&P 500 Index since late October but has recently started to show improving relative performance. The technology sector tends to perform well into late January on a seasonal basis. If the stock market is expected to perform well into yearend, the technology sector would be expected to participate in this rally.
Global X Gold ETF (HUG TSX)
Gold has performed well in 2024. It has pulled back since late October but has recently started to show strength. Gold has performed well in 2024 as central banks have been large buyers. Central banks tend to be price insensitive and continue to buy. Gold has a strong seasonal period from Dec. 27 to Jan. 26.
iShares Russell 2000 ETF (IWM NYSEARCA)
The small cap sector has recently outperformed the S&P 500 since early November when Trump was elected. Trump’s domestically focused policies should help to support higher prices in the small cap sector. In addition, tariffs should also help to support domestically focused companies. The small cap sector has a strong seasonal period from mid-December until early March.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| XLK NYSEARCA | N | N | Y |
| HUG TSX | N | N | Y |
| IWM NYSEARCA | N | N | Y |
PAST PICKS: MAY 3, 2024
Health Care Select Sector SPDR Fund (XLV NYSEARCA)
- Then: $140.83
- Now: $146.11
- Return: 4%
- Total Return: 4%
Utilities Select Sector SPDR Fund (XLU NYSEARCA)
- Then: $68.41
- Now: $80.99
- Return: 18%
- Total Return: 20%
Global X US 7-10 Year Treasury Bond ETF (HTB TSX)
- Then: $54.79
- Now: $59.04
- Return: 8%
- Total Return: 8%
Total Return Average: 11%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| XLV NYSEARCA | N | N | N |
| XLU NYSEARCA | N | N | N |
| HTB TSX | N | N | N |