ETF Temperature Check

Gregory S. Davis | January 11, 2025

Reviewed by etfready.com staff

Sauna Break

Extremes of relaxing heat and bone chilling cold can be found at SweatHouz Infrared Sauna Studio. 

In my opinion is excellent for a Wellness Escape! 

Extremes also describes the present moment in the US with wildfires in California and blankets of snow covering the northeast and reaching south to the Carolinas.

The U.S. markets were closed on Thursday, January 9, 2025 in honor of the 39th President of the United States, Jimmy Carter.  When the market reopened on Friday, the Dow fell 696 points on weaker than expected jobs report data and inflation concerns.

ETFReady.com, Market Snapshot as of 01/11/2025

Despite the falling Dow a select group of top performing ETF’s YTD are all from trailing sectors of 2024.  The VanEck Gold Miners ETF (GDX) is up 2.87%, the Energy Select SPDR Fund (XLE) is up 1.59% and the Health Care Select SPDR (XLV) is up 0.98%. 

ETFReady.com, Top 6 Sectors of 2024, YTD through 01/10/2025

While definitely not down and out ETFs that have fallen the most YTD include the Vanguard Real Estate Index (VNQ) down -3.99%, the Consumer Staples Select SPDR (XLP) down -3.37% and the Financial Select SPDR (XLF) down -2.93%.

ETFReady.com, Trailing 6 Sectors of 2024, YTD through 01/10/2025

Bright spots in the market were in Crude Oil, up 3.58% to 76.57 and the 10 Yr. Bond was also up 1.77% to a new yield of 4.77%.  Investors may wonder if a red-hot stock market can continue with less risky assets offering reasonable rates of return.

Temperature Gauge

One way to gauge the temperature of the market is to keep an eye on the Shiller PE Ratio.  The Price to Earnings Ratio communicates how much an investor is willing to pay per $1.00 of earnings.  Higher PE Ratio suggest higher expectations of future earnings growth. 

The Shiller PE Ratio, which measures average company earnings of the past ten years, is currently at 36.98.  With a mean of 17.19 the market may not be overheated, but perhaps more cool off moments like this Friday may become the normal in the months to come.

by Gregory S. Davis

Disclosure: At time of publication I own the XLE ETF.