Sector Rotation Analyst#

Identify which of the 11 GICS sectors are leading or lagging the market using live sector performance data, ETF holdings, and index constituent analysis from the Finskills API. Generates a sector rotation map with actionable over/underweight recommendations aligned with the current macro regime.

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Setup#

API Key required — Register at https://finskills.net to get your free key.

Header: X-API-Key: <your_api_key>

Get your API key: Register at https://finskills.net — free tier available, Pro plan unlocks real-time quotes, history, and financials.

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When to Activate This Skill#

Activate when the user:

• Asks which sectors are leading or lagging the market
• Wants top stock picks within a specific sector
• Asks about sector rotation strategy based on the economic cycle
• Wants to understand which ETFs offer sector exposure
• Asks "where is smart money flowing?" or "which sectors are hot right now?"

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Data Retrieval — Finskills API Calls#

1. Sector Performance Data#

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GET https://finskills.net/v1/market/sectors

Extract: All 11 GICS sectors with performance across timeframes: 1D, 1W, 1M, 3M, YTD, 1Y

2. ETF Holdings (for sector leaders)#

For each sector's representative ETF (XLK, XLF, XLV, etc.):

text

GET https://finskills.net/v1/free/etf/holdings/{SECTOR_ETF}

Extract: top 10 holdings (ticker, weight, company name)

3. S&P 500 Index Constituents (for sector weights)#

text

GET https://finskills.net/v1/free/index/SP500/constituents

Extract: all constituents with sector classification — compute actual S&P 500 sector weights

4. Market Summary (Benchmark Context)#

text

GET https://finskills.net/v1/market/summary

Extract: S&P 500, Nasdaq, Russell 2000 performance for relative comparison

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Sector ETF Reference Map#

SectorETFDescriptionTechnologyXLKSoftware, hardware, semiconductorsHealthcareXLVPharma, biotech, medical devicesFinancialsXLFBanks, insurance, asset managersConsumer DiscretionaryXLYRetail, autos, restaurantsIndustrialsXLIDefense, aerospace, constructionCommunication ServicesXLCMedia, telecom, internetConsumer StaplesXLPFood, beverage, household productsEnergyXLEOil & gas, refinersReal EstateXLREREITsMaterialsXLBMining, chemicals, paperUtilitiesXLUPower, water, gas utilities

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Analysis Workflow#

Step 1 — Sector Performance Snapshot#

Create a leaderboard for each performance period: 1D, 1W, 1M, 3M, YTD:

Rank sectors from best to worst performer for each timeframe.

Flag divergences:

• Sector outperforming YTD but recently lagging 1M: momentum fade, potential reversal
• Sector lagging YTD but recently leading 1M: early rotation, potential breakout

Relative strength vs. S&P 500 for each sector:

text

Sector Relative Return = Sector Return − S&P 500 Return (same period)

• Positive = outperforming (overweight candidate)
• Negative = underperforming (underweight candidate)

Step 2 — Sector Rotation Cycle Mapping#

Map current sector performance to the classic economic cycle:

text

Economic Cycle → Sector Leadership Pattern:

Early Recovery (recession ending):
  Leaders: Consumer Discretionary, Financials, Industrials
  Laggards: Utilities, Consumer Staples, Healthcare

Middle Expansion (goldilocks):
  Leaders: Technology, Industrials, Basic Materials
  Laggards: Utilities, Consumer Staples

Late Expansion (overheating):
  Leaders: Energy, Materials, Healthcare
  Laggards: Financials, Consumer Discretionary

Contraction (recession):
  Leaders: Consumer Staples, Utilities, Healthcare
  Laggards: Energy, Financials, Consumer Discretionary

Cross reference actual sector performance to infer the current cycle phase and whether the market is rotating toward or away from the expected pattern.

Step 3 — Top Stock Leaders Within Sectors#

For the top 2–3 leading sectors, extract top ETF holdings:

• List top 5 companies by weight in the sector ETF
• Note weighting (stocks with > 10% weight dominate ETF returns)
• Flag the sector ETF's largest contributors to recent performance

Step 4 — Sector Concentration in S&P 500#

From the index constituents data:

• Show current S&P 500 sector weights
• Flag if any sector is > 30% weight (systemic concentration risk for index investors)
• Note sector weight trend (growing vs. shrinking weight)

Step 5 — Recommendations#

Provide:

• Overweight (OW): 2–3 sectors with strongest momentum + macro tailwinds
• Neutral (N): sectors with mixed signals or in transition
• Underweight (UW): sectors with weakening momentum + macro headwinds

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Output Format#

text

╔══════════════════════════════════════════════════════╗
║    SECTOR ROTATION REPORT  —  {DATE}                ║
╚══════════════════════════════════════════════════════╝

📊 SECTOR PERFORMANCE LEADERBOARD
  Sector               ETF    1D      1W      1M      3M      YTD
  ─────────────────────────────────────────────────────────────────
  Technology          XLK    +1.8%   +3.2%   +8.1%   +15.2%  +22.4%
  Communication Svcs  XLC    +1.2%   +2.1%   +5.3%   +11.0%  +18.1%
  Consumer Disc.      XLY    +0.9%   +1.0%   +2.2%   +5.1%   +12.3%
  Industrials         XLI    +0.4%   +0.3%   +1.1%   +3.2%    +8.4%
  Financials          XLF    -0.1%   -0.5%   +0.8%   +2.1%    +6.2%
  Healthcare          XLV    -0.3%   +0.1%   -0.5%   +1.0%    +4.1%
  Materials           XLB    -0.5%   -1.2%   -1.0%   +0.2%    +2.1%
  Energy              XLE    -0.8%   -2.1%   -4.2%   -3.0%    -2.4%
  Real Estate         XLRE   -1.0%   -1.5%   -2.3%   -1.2%    -3.0%
  Consumer Staples    XLP    -1.1%   -1.0%   -1.8%   +0.5%    +2.0%
  Utilities           XLU    -1.4%   -2.0%   -3.1%   -2.5%    -1.5%
  ─────────────────────────────────────────────────────────────────
  S&P 500 (SPY)              +0.5%   +0.8%   +2.3%   +5.4%   +10.2%

🔄 ROTATION CYCLE SIGNAL: {Cycle Phase — e.g., "Mid-to-Late Expansion"}
   Market aligning with: {expected leaders for this cycle} ✅
   Anomalies: {any sectors not behaving as expected}

🏆 TOP SECTORS — EXPANDED VIEW

  #1 Technology (XLK) — YTD +22.4% vs SPY +10.2% (+12.2pp)
  Top Holdings: AAPL {weight}%, MSFT {weight}%, NVDA {weight}%, ...
  Catalyst: {AI capex cycle / Strong pricing power / etc.}

  #2 Communication Services (XLC) — YTD +18.1% vs SPY +10.2% (+7.9pp)
  Top Holdings: GOOG {weight}%, META {weight}%, ...
  Catalyst: {Digital advertising recovery / streaming growth}

  #3 {Next sector...}

📉 WEAKEST SECTORS
  Utilities (XLU) — YTD -1.5% | Headwind: Rising rates hurt dividend valuations
  Energy (XLE) — YTD -2.4% | Headwind: Oil supply increase, demand concerns

🏛️ S&P 500 SECTOR WEIGHTS
  Technology: {%} | Healthcare: {%} | Financials: {%} | ...
  [⚠️ Flag if Tech > 30%]

🎯 TACTICAL RECOMMENDATIONS
  OVERWEIGHT:  {Sector 1}, {Sector 2}  —  {rationale}
  NEUTRAL:     {Sector 3}, {Sector 4}
  UNDERWEIGHT: {Sector 5}, {Sector 6}  —  {rationale}

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Limitations#

• Sector ETF performance may diverge from underlying sector due to size/weight concentration.
• Sector rotation is a medium-term (1–6 month) framework; it has low signal at daily resolution.
• ETF holdings data may lag actual portfolio composition by 1–3 months.