In this week’s Markets in Motion, Bruce Campbell turns his attention to the energy sector, highlighting continued leadership across both U.S. and Canadian large-cap names.
Using relative rotation analysis, Bruce notes that several of the largest holdings in the Energy Select Sector SPDR ETF (ARCA:XLE) are positioned firmly in the leading quadrant — meaning they are outperforming the broader market, in this case the S&P 500, with strengthening momentum. Stocks trending northeast within this framework typically signal sustained relative strength.
The same pattern is visible north of the border. Major TSX energy names including Canadian Natural Resources (TSX:CNQ), Suncor (TSX:SU), Imperial Oil (TSX:IMO), Cenovus (TSX:CVE), Enbridge (TSX:ENB), and TC Energy (TSX:TRP) are also clustered in the leading quadrant. This alignment across markets suggests energy is emerging as a clear leadership group.
Fund flow data further supports the move. After months of mixed activity, the XLE ETF has seen notable inflows over the past five weeks. Increased subscriptions into sector ETFs can act as a tailwind, providing incremental demand that supports stock performance.
In Canada, inflows into the Ninepoint Energy ETF (GREY:NNPEF) have been more modest but stable, with redemptions easing compared to earlier periods. While not as pronounced as in the U.S., the trend suggests improving sentiment toward Canadian energy equities.
With strong relative positioning and accelerating capital flows, energy remains a sector investors may want to monitor closely in the weeks ahead.
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