The S&P 500 Communications Services sector advanced 4.3% yesterday, notching a second consecutive gain of more than 4%. The rally carried the sector back above both its 50 and 200-day moving averages, although the downtrend from its May 13 high remains in place.
Since the sector’s reshuffling in 2018, which expanded from telecoms to include major media and internet companies, this is the first two-day rally of more than 9%. Taken together, last Friday and Monday’s performance totaled 9.1% for the best two days since 11/25/08.
Only six rolling two-day periods since 1990 have produced a larger gain. Of those six, four came during the Financial Crisis in October and November 2008, including a record 15.19% ascent ending 10/14/08. Another occurred in the two days ending January 4, 2001, amid the Dot-Com bear market, and the last came in October 2002 near that bear market’s low. In other words, gains of this magnitude have historically been less a sign of celebration than a feature of markets rebounding from severe selling.
Breadth was flat during Friday’s rally, but it improved yesterday to its best reading since Christmas Eve last year. Of the 24 sector constituents, only Charter Communications (CHTR) and Warner Bros Discovery (WBD) declined on Monday. Leading the charge higher were Meta Platforms (META) and Alphabet (GOOGL). GOOGL created the largest positive impact on the S&P 500 yesterday, adding 20.5 index points, while META added 9.1 points, the fifth-largest positive impact.
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