Sector, Factor, And Global Edge For 11/30/2016

All factors are now in the green, while sectors and global categories remain mixed. Financials, High Beta, and the U.S. continue to provide the leadership for their respective groups.

Sectors:

Financials extended its reign as the strongest sector in the post-election environment to a fourth week. Although the disparity between it and last-place Real Estate is not as drastic as the 97-point spread of two weeks ago, today’s 75-point difference is quite significant. The Industrials and Materials duo has now completed their third week in the second and third spots, indicating investor optimism toward the “smokestack” manufacturing economy. Energy had previously tucked itself into fourth place, but weakening oil prices knocked it three places lower this week. Today, a new OPEC production cut agreement is sending oil higher, laying the foundation for an Energy sector rebound. Consumer Discretionary, Telecom, and Utilities are three sectors that climbed in the rankings this week, although the small moves did not alter the larger picture, and Utilities remains in the red. All four of the bottom-ranked sectors improved their momentum scores this week, but not enough to move any of them back to the positive side of the ledger.

Factors: Momentum and Low Volatility, the only two factors in the red last week, have now transitioned to positive territory. High Beta has been the best-performing factor for about four months, but Size has strengthened and all but eliminated the gap that relegates it to second place. Dividend Growth was the only factor to improve its relative ranking, as it climbed two spots to fifth and pushed Market Cap and Quality lower. Growth is now lagging Value by a wide margin, while Yield, Momentum, and Low Volatility are lagging the field.

Global: Two more global categories moved into positive trends, but five others remain firmly in the red. The U.S. tops the chart for the third consecutive week after wresting control from Latin America, which provided much of the global leadership earlier in the year. Canada holds the second-place spot for a second week, but Japan slipped a notch to fourth as it traded places with World Equity. Pacific ex-Japan and China were the two categories moving to green, although they are barely over the line and vulnerable to slipping back. There is a large gap in momentum scores between China and the five categories in the red. EAFE, the U.K., and Latin America held steady this past week, while there was a shift at the bottom. Emerging Markets climbed ahead of the Eurozone and pushed it to last place.