3 U.S. Sectors You Need To Watch

Research Notes January 2026 > https://www.unum.capital/post/rjan2026

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US Sector Comparative Analysis:

Period: 31 Dec 2025 vs. 09 Jan 2026

Materials: 🟢 Supernova. The most dramatic shift on the board. Went from a sleeper (Triple Neutral) to "Double High Bullish / Overbought." This is a violent re-rating.

Industrials: 🟢 Cyclical Breakout. Long Term improved from "Weak" to "Neutral," while Medium and Short terms synchronized at "Strong." The industrial economy is leading.

Cons. Disc.: 🟢 Consumer Awakening. Massive reversal. Short Term flipped from "Weak" to "Strong," pulling the Medium Term up with it. Suggests renewed confidence in consumer spending.

Energy: 🟢 Tactical Pulse. Short Term momentum improved from "Neutral" to "Strong," offering a trading opportunity despite the Long Term "Weak" rating.

Technology: 🟡 Loss of Primacy. A significant structural blow. The Long Term rating dropped from "Strong" to "Neutral." Tech is no longer leading the S&P 500.

Healthcare: 🟡 Momentum Drain. Medium Term dropped from "Strong" to "Neutral." The defensive bid has dried up as money chased cyclical beta.

Financials: ⚪ Stasis. No change. Remains the "steady eddy" of the market with Neutral ratings across the board.

Cons. Staples: ⚪ Deep Value Trap. No change. Long Term remains "High Bearish Momentum," indicating the falling knife hasn't landed.

Communications: 🔴 Momentum Failure. The biggest loser of the week. Crashed from "Double Strong" (Med/Short) to "Neutral/Weak." The trade was crowded and liquidated.

Utilities: 🔴 Breakdown. Short Term support gave way, dropping the sector to a "Triple Weak" profile.

Real Estate: 🔴 Crisis Deepens. Deteriorated further. Medium Term momentum worsened from "Weak" to "High Bearish Momentum." The structural downtrend is accelerating.

Key Technical Shifts Explained

1. The "Real Economy" Rotation: The first week of 2026 was defined by a massive rotation out of "bits and bytes" (Tech, Comms) and into "atoms" (Materials, Industrials). Materials going from Neutral to "High Bullish" in one week is rare and indicates institutional panic-buying of hard assets.

2. The Death of the "Growth" Trade: Technology losing its Long Term "Strong" rating is a major signal. It suggests that Tech's multi-year period of outperformance vs. the SPY may be pausing. Combined with Communications collapsing from "Strong" to "Weak," the growth factor is currently being liquidated.

3. Interest Rate Stress: While Cyclicals rallied, the interest-rate-sensitive bond proxies (Real Estate, Utilities) were crushed. Real Estate hitting "High Bearish Momentum" suggests the market is pricing in higher-for-longer yields or specific commercial real estate stress.

Lester Davids

Senior Investment Analyst: Unum Capital