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 iShares Expanded Tech-Software Sector ETF (IGV) & Invesco Food & Beverage ETF (PBJ)

Stock markets have started to rebound this week. Monday and Tuesday saw an overall down month for October finish with a couple of decently positive days which could be attributed to a combination of window dressing, short covering and bargain hunting ahead of month end. November started off positively yesterday with gains accelerating into the close following the Fed decision and Powell press conference.

The US central bank held its benchmark Fed Funds rate steady and there were no major surprises in the statement or press conference with Chair Powell leaving the door open both to more rate hikes and to potentially pausing as the fight against inflation continues. US Treasury yields backed off a bit on this slightly-less-hawkish-than-last-time hold.

Overseas markets continued to struggle with Canada, Australia, Germany, Japan, the UK and other countries remaining under pressure. Country declines have been more moderate so far this week and there have been a few moderate gains as well.

Looking at sectors, three of the 11 major industry groups posted gains last week, Financials, Utilities, and Industrials, suggesting some of the selling pressure against interest sensitive groups may be starting to ease a bit. The worst performing groups were Technology, Consumer Staples, and Health Care as defensives continue to struggle.

On balance, earnings reports continue to be positive for the most part, reflecting a robust summer economy. For the most part, markets have taken the results in stride with few companies staging big rallies on news, but disappointments continuing to spark selloffs. Following tonight’s results from Apple, we move past the peak of earnings season for US large cap companies.

Stateside reports next week are dominated by a large number of small cap and mid cap companies with the headliners being media giants Walt Disney and Warner Bros Discovery. Canada continues to move through the peak of earnings season with results due from senior mining and energy companies plus the life insurers including Suncor Energy, Manulife, Great West Life, Franco-Nevada, Tourmaline Oil, Constellation Software, Rogers Communications, Canadian Tire, and others.

There are still a number of notable economic reports on the way in the coming days including tomorrow’s North American employment reports, and Service PMI results from around the world. Next week is relatively quiet for data, headlined by trade numbers for the US, Canada and China.

In this edition of Equity Leaders Weekly, we look at what recent declines in the high-beta/cyclical software sector and the low-beta/defensive food sector are telling us about the breadth of the recent market selloff.

iShares Expanded Tech-Software Sector ETF (IGV)

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