US SECTORS CALL: Information Technology, Energy & Consumer Discretionary

Information Technology (MW) led the S&P 500 sectors last week, up 1.8%. The sector rose 3.4% on Thursday following Nvidia’s results the previous evening. Nvidia guided to 70% revenue growth next fiscal year against a 45% consensus. Energy (OW) was among the weakest, down 2.0%, while Consumer Discretionary (UW) rose 0.1%. The rate-sensitive sectors sold off on Friday after Warsh’s Jackson Hole speech, with Real Estate (UW) down 1.3% on the week and Utilities (OW) down 4.0% on the month (chart).

Here's more on Software, Energy, and Consumer Discretionary:

(1) Software: Cyber and SaaS soar. Dr. Ed said on CNBC on February 26 that the market had overdone AI's potential negative impact on software stocks. The iShares Expanded Tech-Software ETF closed at $82.60 that day. It closed Friday at $109.50, up 32.6% since then (chart). Markets initially priced software as a sector vulnerable to AI disruption, yet it is proving to be the essential distribution layer for AI integration.