Sector RS Rank Oct 29: Defense Lead, Software Fall
Contents
💡 Today’s US market in three lines
① Today’s three stocks: Herc Holdings · Fortive · Elbit Systems
② What rose today: aerospace and defense, homebuilders, pharmaceuticals
③ What pulled back: software, cloud computing, communication services
Today’s Sector Relative Strength (RS)
- Alphabet fell -12.64% on October 29 after its quarterly report, and it pulled the Nasdaq down with it. The Nasdaq closed at 26,184.72 (-1.38%), the S&P 500 at 7,720.39 (-0.30%), and the Dow at 52,342.56 (-0.25%). Software took a second hit: ServiceNow dropped -26.95% and Fortinet -20.09%. Below the surface, the market was healthier. The equal-weight S&P 500 (RSP) rose +1.2%, and the 10-year yield eased to 4.99% from 5.05%.
- Of the 129 ETFs in our universe, 66 closed higher and 63 fell. Health care (XLV) led the 11 sectors at +2.40%. Communication services (XLC) were last at -1.87%. Nine sectors rose and two fell. Only the two big-tech sectors ended in the red.
Today’s Leading Sectors TOP 5
| ETF | 1-Day | RS Rank 1M | Short-Term | Mid-Term | Long-Term |
|---|---|---|---|---|---|
| United States Oil Fund (USO) | +0.97% | 99 | 🔺 | 🔺 | 🔺 |
| iShares U.S. Oil and Gas Exploration (IEO) | -0.50% | 98 | 🔺 | 🔺 | 🔺 |
| Energy Select Sector SPDR (XLE) | +0.38% | 97 | 🔺 | 🔺 | 🔺 |
| iShares U.S. Healthcare Providers (IHF) | +1.11% | 96 | 🔺 | 🔺 | 🔺 |
| iShares Cybersecurity and Tech (IHAK) | -1.30% | 96 | 🔺 | 🔺 | 🔺 |
- Oil (USO) held first place. Cloud computing (WCLD) slid to 92 and cybersecurity (BUG) to 89, so both left the table. Energy (XLE) and health care providers (IHF) took their places. All five still trade above their 1-month, 1-quarter, and 1-year averages.
Why They’re Strong — Sector Issues
· Aerospace and defense (XAR) — Up +4.58%, the day’s best gain, sheet RS rank 54. FTAI Aviation jumped +17.27%, Huntington Ingalls +13.23%, and Textron +11.67%. L3Harris rose +6.84% after beating estimates and raising its outlook, according to reports.
· Home construction (ITB) — Up +3.49%, sheet RS rank 72. Builders FirstSource rose +12.85%, Installed Building Products +6.17%, and Floor & Decor +5.87%. The lower 10-year yield helped the whole housing chain.
· Industrial renaissance (AIRR) — Up +2.44%, sheet RS rank 46. Huntington Ingalls +13.23%, Karman +9.77%, and Kratos +5.88% did most of the lifting. Defense names showed up in two different funds’ leader lists.
· US pharmaceuticals (IHE) — Up +2.84%, sheet RS rank 79. Eli Lilly rose +6.63% to a one-year closing high, and Merck gained +3.83%. Both beat estimates and raised their full-year forecasts, according to reports.
What Changed From Yesterday
- Aerospace and defense (XAR) posted the biggest one-day rank gain, 36 to 57. Almost all of it came from Thursday’s +4.58% move. Home construction (ITB) followed, 57 to 75.
- Cloud computing (CLOU) and software (IGV) each lost 32 points, and most of it was Thursday’s price drop. Wednesday’s report said humanoid robotics (HUMN) needed a second strong day. It fell -3.35% instead and dropped from 60 to 40. That call did not hold.
1-Month RS Trend
- Home construction (ITB) climbed from 13 to 75 over the window, and aerospace and defense (XAR) from 38 to 57. Industrial renaissance (AIRR) moved from 34 to 45. Software (IGV) slipped from 85 to 56, and communication services (XLC) from 28 to 16. Homebuilders made the biggest climb of the five.
RS Breakdown Warnings
- Social media (SOCL) fell from 60 to 29, the deepest drop. Oil refiners (CRAK), gaming and esports (HERO), and the metaverse fund (METV) joined it. Four others, including e-commerce (EBIZ) and residential REITs (REZ), were dropped because Thursday’s price moved the other way or was flat.
RS Rebound Signals
- Aerospace and defense (XAR) rose from 33 to 57, the largest move. Space and deep sea (ROKT) and space (UFO) also qualified. Four other funds, including humanoid robotics (HUMN) and data centers (DTCR), were dropped because Thursday’s price fell.
Today’s Top Rising Sectors TOP 5 (by 1-day %)
| ETF | 1-Day | RS Rank 1M | Short-Term | Mid-Term | Long-Term |
|---|---|---|---|---|---|
| SPDR S&P Aerospace and Defense (XAR) | +4.58% | 54 | 🔺 | 🔽 | 🔽 |
| iShares U.S. Home Construction (ITB) | +3.49% | 72 | 🔺 | 🔺 | 🔽 |
| SPDR S&P Homebuilders (XHB) | +3.37% | 75 | 🔺 | 🔺 | 🔽 |
| iShares U.S. Aerospace and Defense (ITA) | +3.16% | 59 | 🔺 | 🔽 | 🔽 |
| iShares U.S. Pharmaceuticals (IHE) | +2.84% | 79 | 🔺 | 🔺 | 🔺 |
Why They Rose
- Defense and housing each took two spots. Pharmaceuticals (IHE) is the only one of the five above all three averages. The defense funds are still below their 1-quarter and 1-year averages. On the other side, blockchain (BKCH) -3.76%, silver (SLV) -3.63%, cloud computing (CLOU) -3.56%, and software (IGV) -3.52% led the decliners.
Leading Sectors: Aerospace and Defense, Homebuilders, Pharmaceuticals
- ① Aerospace and defense ranks 54 on the sheet. It is still below its 1-quarter and 1-year averages, so Thursday reads as a rebound, not a new uptrend.
- ② Homebuilders rank 72 and climbed most over the month. The move depends on yields staying near 5%.
- ③ Pharmaceuticals rank 79 and sit above all three averages. Lilly’s and Merck’s beats give the move earnings support.
- ④ The last report covered the October 28 close. Its three picks from that close to Thursday’s: Labcorp +2.20%, GE HealthCare +0.79%, and GRAIL +0.66%, against -0.30% for the S&P 500. All three beat the market again. Recorded as is.
Today’s Three Stocks — Herc Holdings · Fortive · Elbit Systems Stock Forecast
- Thirty-six stocks passed the four-part filter. These three fit the day’s leaders.
Herc Holdings (HRI) — Equipment Rental Stock Forecast
| Stock | RS 1D | RS 5D | RS 1M | 1M Return | Held By |
|---|---|---|---|---|---|
| Herc Holdings (HRI) | 94 | 100 | 99 | +39.4% | First Trust RBA American Industrial Renaissance 3.5% |
- Closed at $173.95, +4.68%, its highest close since February. Herc rents construction and industrial equipment to contractors and large project builders. It reported on October 27 and has closed higher in all three sessions from that day. The Herc Holdings stock forecast rests on data center and infrastructure demand. For the quarter ended September 30, total revenue rose +5% to $1.364 billion, and equipment rental revenue rose +12% to a record $1.254 billion. Net income was $104 million, or $3.10 per share. The company raised its full-year guidance for the second time this year.
Fortive (FTV) — Industrial Instruments Stock Forecast
| Stock | RS 1D | RS 5D | RS 1M | 1M Return | Held By |
|---|---|---|---|---|---|
| Fortive (FTV) | 82 | 89 | 94 | +20.1% | Global X U.S. Infrastructure Development 1.1% |
- Closed at $65.84, +2.70%, a one-year closing high. Fortive makes test tools, sensors, and safety software for factories and utilities. It reported on October 28. The Fortive stock forecast is built on steady growth more than a single jump. For the quarter ended September 30, revenue rose +7.8% to $1.11 billion. Net earnings rose +47.4% to $173 million, or $0.57 per share. The company raised its full-year adjusted EPS range to $3.10 to $3.14.
Elbit Systems (ESLT) — Israeli Defense Electronics Stock Forecast
| Stock | RS 1D | RS 5D | RS 1M | 1M Return | Held By |
|---|---|---|---|---|---|
| Elbit Systems (ESLT) | 90 | 86 | 93 | +18.4% | SPDR Kensho Final Frontiers 2.4% |
- Closed at $807.41, +3.61%. Elbit is an Israeli maker of drones, electronic warfare gear, and artillery systems. We found no single report behind Thursday’s move. The Elbit Systems stock forecast rests on its order book. For the quarter ended June 30, revenue rose +15.9% to about $2.29 billion, and net income rose to $173.6 million, or $3.61 per share. The backlog reached a record $32 billion. The third-quarter report is expected in late November, based on past timing.
Herc Holdings · Fortive · Elbit Systems Stock Forecast Checkpoints
· Herc Holdings stock forecast — The report-day close was $156.06 on October 27. Watch whether the stock holds above $156.06. The February high close of $181.12 is the next level above.
· Fortive stock forecast — The stock cleared its July high close of $64.09 on Thursday. Watch whether it stays above $64.09 as the post-report move settles.
· Elbit Systems stock forecast — The stock is up +8.6% in five sessions. Watch whether it holds above $790.00, the October 27 close. A drop below $724.32, its 20-day average, would end the short-term uptrend.
What to Watch on Next Week’s Calendar
- 🔴 Apple results, Monday, November 2, 4:00 p.m. ET · Palantir results, Monday, November 2, 4:00 p.m. ET · AMD results, Tuesday, November 3, 4:00 p.m. ET
- Software (IGV) fell from 88 to 56 in one day, and communication services rank 16. These reports will show whether the selling stays with Alphabet and software or spreads.
- 🔴 US midterm elections, Tuesday, November 3 · General Dynamics results, Friday, October 30, 8:00 a.m. ET
- Aerospace and defense (XAR) posted the day’s best gain but ranks only 54. A defense prime’s report and the election outcome are the next tests for the rebound.
- Employment Cost Index, Friday, October 30, 8:30 a.m. ET · ISM manufacturing, Monday, November 2, 10:00 a.m. ET · ISM services, Wednesday, November 4, 10:00 a.m. ET
- Homebuilders rose as the 10-year yield slipped back under 5%. Hot wage or activity data would push yields up and test that move first.
- AbbVie and Regeneron results, Friday, October 30, 8:00 a.m. ET · Pfizer results, Tuesday, November 3, 8:00 a.m. ET · 🔴 Tesla Optimus Gen 3 production, November–December
- Pharmaceuticals (IHE) rose behind Lilly and Merck. These reports will show whether the rest of the group can follow. Humanoid robotics (HUMN) fell to 40, and Tesla’s Optimus timeline is that theme’s next test.
