Here’s some good news following the rough October for the S&P 500: November is usually good for stocks. And a few sectors tend to lead the way.
Eight stocks in the S&P 500, including mostly financials like SVB Financial (SIVB) and Bank of America (BAC) plus industrial leader Copart (CPRT), are big winners in November. All these stocks topped the S&P 500 in November each of the past five years in a row. And they jumped an average of 8% or more in November since 2015, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Seeing gains would be welcome following a brutal finish to October. The SPDR S&P 500 ETF Trust dropped 2.4% in October. The only sector to rise during the month is the ultra-defensive Utilities Select Sector SPDR ETF (XLU), which rose 5.1%.
“The downside risks that have been evident in these markets for weeks are slowly materializing and the next big uncertainty, the U.S. election, is now upon us,” said Craig Erlam, senior market analyst at Oanda. “It’s little surprise investors are heading for the havens; there’s hardly an abundance of good news out there.”
S&P 500: Setting Up For Better Times In November
October is known as the “jinx month.” But in contrast, November has a great reputation with investors.
November, historically, is the best month of the year, says the “Stock Trader’s Almanac.” The S&P 500, on average, gained 1.6% in November since 1950. And even in election years the S&P 500 jumped 1.5% on average.
And it gets better. November traditionally kicks off the “best six months” of the year for the S&P 500. And buying of stocks by companies and pension plans tends to pick up starting on Nov. 1, says Stock Trader’s Almanac.
Recent history confirms November strength for the S&P 500. The S&P 500 gained 1.5%, on average, in November the past five years. And it didn’t fall a single time in November from 2015 on. Last November the S&P 500 jumped 2.5%. And even in November 2016, another hotly contested U.S. Presidential election year, the S&P 500 rose 3.7%.
Financials Perk Up In The S&P 500 In November
There’s no question which S&P 500 sector fares best in November. It’s the financials.
The Financial Select Sector SPDR (XLF) gained an average of 5.4% in November the past five years. That’s almost a full percentage point higher than the average 4.5% gain of the month’s No. 2 best sector: The Industrial Select Sector SPDR (XLI).
And when you look at the top S&P 500 stocks in November, it’s no surprise. It’s not just any financials, either, but some of the leaders. The best S&P 500 stock the past five Novembers is SVB Financial. But it’s a unique situation.
SVB, a Santa Clara, Calif. bank, is up 14.3% this year. That’s remarkable as the financials sector is actually down 22.5% in 2020 so far. Additionally, the bank’s profit jumped 64% in the third quarter of 2020. No wonder it’s a leading financial with an IBD Composite Rating of 96.
Another stellar financial is IBD Long-Term Leader watchlist company MarketAxess (MKTX). The bond trading firm’s shares are up nearly 42% this year. And it was also one of the S&P 500 winners that’s been completely shielded from the market’s pain in October. And it’s usually a winner in November, too. It’s gained, on average 8.2%, in November since 2015.
Clearly, investors have plenty to worry about in the next few days. But hopefully, November makes up for October.
Top S&P 500 Stocks In November
They’ve topped the index every November for five year by a 8% average or more
|Company||Symbol||Stock Average % Gain Nov. Since 2015||YTD % Ch. Stock||Sector||Composite Rating|
|Bank of America||(BAC)||8.9%||-32.7%||Financials||26|
|Raymond James Financial||(RJF)||8.4%||-14.6%||Financials||63|
|Fifth Third Bancorp||(FITB)||8.2%||-24.5%||Financials||71|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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