L Brands, MGM Led the S&P 500 This Week as Reopening Optimism Spreads

MGM Resorts Leading S&P 500 This Week, Lifted by Economic Optimism

L Brands and MGM Resorts were the top-performers member of the S&P 500 this week as economic optimism overshadowed strong earnings from Big Tech.

L Brands (LB) rose 21 percent since Friday, January 29, after preannouncing better-than-expected fourth quarter results. The parent of Bath & Body Works is also targeting August for spinning off or divesting Victoria’s Secret.

The casino operator rose 20 percent, at one point hitting a new 34-month high of $34.66.

S&P 500 Member1-Week %Sector
L Brands (LB)+21%Consumer Discretionary
MGM Resorts (MGM)+20%Consumer Discretionary
Tapestry (TPR)+19%Consumer Discretionary
Under Armour (UAA)+18%Consumer Discretionary
Align Technology (ALGN)+18%Health Care

Consumer-related stocks seem to be benefiting from optimism about travel rebounding as the economy reopens and the coronavirus pandemic eases. (CDC data shows daily cases under 120,000 this week, down about 50 percent in the last month.)

After all, the broader market this week has mostly focused on economic recovery. Energy and financials were leading sectors. Safe-havens like health-care and utilities, which often lag when the economy accelerates, rose the least.

In another sign of confidence, yields on 30-year Treasury Bonds ($TYX.X) have risen to their highest level since February 20, 2020. That was less than a week before the pandemic slammed markets.

MGM Resorts (MGM), daily chart, with 50- and 100-day moving averages.
MGM Resorts (MGM), daily chart, with 50- and 100-day moving averages.

The Russell 2000 Small Cap ETF (IWM), which also benefits from a strong economy, is the leading index fund. (See our separate story for more on the potential shift toward smaller companies on the Nasdaq.)

MGM reports earnings next Wednesday, February 10, after the closing bell. LB reports on February 24. They’re both members of the consumer-discretionary sector, tracked by the SPDR Consumer Discretionary ETF (XLY). Interestingly, four of the top five performers in the S&P 500 belong to the same sector.

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