The S&P 500 rose 5.4% in price in November, for its second-consecutive monthly advance. The last time the S&P 500 was able to post successive gains was August 2021, recalls chief investment strategist Sam Stovall in CFRA Research's flagship newsletter, The Outlook.

Besides the pop in the S&P 500, all sizes, styles, and sectors within the S&P 1500 also gained in price, led by communication services, industrials, and materials. What’s more, 90% of its 148 sub-industries rose in price. Year-to-date (YTD) through November 30, the 14.4% decline was sixth worst of all years since 1945.

Despite being among the 10 deepest YTD declines, history offers some optimism, since these 10 periods saw the S&P 500 go on to post a positive return in December 60% of the time.

Encouraged by a less hawkish sounding Fed Chair Powell, as well as an ongoing easing of inflationary indicators, investors look forward to a traditional seasonal bounce and a possible passing of the sector leadership baton.

For much of 2022, as the S&P 1500 slipped into a 25%+ bear market, the leaders were the traditionally defensive consumer staples, energy, health care, and utilities sectors, while the laggards were the growth-oriented communication services, consumer discretionary, and technology groups.

Today, however, it appears as if the market is in the early stages of a rotation in sector leadership. Looking at a chart of the 200-day relative performance versus the S&P 500, these defensive groups are beginning to top out, while the growth-groups are starting to turn around.

Specifically, this rotation is quite evident when comparing the trend in utilities with that of technology. Ditto for consumer staples versus consumer discretionary. This “passing of the baton” may be another indicator that the worst could be behind us.

Representative companies from this list of S&P 1500 sub-industries with the highest returns in November are: Freeport-McMoRan (FCX), Alcoa Corporation (AA), CONSOL Energy (CEIX), Tapestry (TPR), Applied Materials (AMAT), Crocs (CROX), Wolfspeed (WOLF), and The New York Times Company (NYT).

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