US Sector Flow & Relative Strength Stock Screener Report (2026-07-28)
Using SPY (739.09) as benchmark, this report breaks down four sectors with sustained capital inflows — defense, large-cap financials, consumer staples, and large-cap pharma — then screens 10 stocks outperforming the broad market using multi-period (1M/3M/6M) RS, liquidity, trend, and fundamental filters.
US Sector Flow & Relative Strength Stock Screener Report (as of 2026-07-27 close)
1. Summary of Currently Hot Sectors
Sector Analysis Table
| Sector | ETF | 6-Month RS Trend | Capital Flow | Core Catalysts |
|---|---|---|---|---|
| Defense / Aerospace | ITA | Sustained uptrend, new highs, clearly outperforming SPY | Strong inflow | European defense budget hikes, prolonged geopolitical tensions, NATO expansion commitments, backlog at RTX/LMT |
| Large-cap Financials | XLF (GS/V/JPM leading) | Mild uptrend, V/GS hitting recent highs | Strong inflow | Higher-for-longer rates, delayed Fed cuts, manageable credit card delinquencies, record AUM |
| Consumer Staples / Warehouse Retail | COST / XLP | Steady uptrend, COST 7/27 close 951.58 (+1.77%) | Stable inflow | Falling inflation, defensive characteristics, Costco comp sales growth, membership fee hike expectations |
| Large-cap Pharma / GLP-1 | LLY / XLV | LLY holding 1197 flat, did not pull back with broad market | Moderate inflow | GLP-1 sales ramp, pipeline progress, AI pharma narrative; Medicare price negotiation impact manageable |
| Biotech (small/mid-cap) | XBI | Counter-trend strength over the past two weeks, clear resilience | Moderate inflow | Peak-rate expectations, FDA approval acceleration, M&A narrative revival (LABU +24% recent month) |
| Semiconductors / Mega-cap Tech | XLK (NVDA/AVGO/META) | High-level consolidation, slightly weaker; XLK 7/27 -0.90% | Top-heavy differentiation | Korean HBM bubble burst, MU/SNDK oversold bounce after halving, Google Cloud + AI capex still supported |
| Energy | XLE | 7/27 -2.11%, Iran tensions escalating but oil price fading | Outflow / weakening | OPEC+ production hike expectations, refining margins normalizing, profit-taking on geopolitical premium |
| REITs / Real Estate | XLRE | Tracking broad market, no clear outperformance | Neutral / wait-and-see | Delayed peak rate, office vacancy still elevated, slow recovery |
Sector-by-Sector Commentary
1. Defense / Aerospace (ITA): The purest momentum sector right now
ITA closed 243.91 on 7/27 (+1.57%), one of the strongest sector ETFs of the day. Capital inflow logic is clear: European defense budget hikes, NATO commitments to raise defense spending to 3%+ of GDP, and prolonged geopolitical tensions driving military order backlogs. Drivers are "long-term industrial policy + geopolitical security necessities," fitting your definition of "sustained institutional accumulation main theme." Forward catalysts: next U.S. defense budget legislation, RTX/LMT/NOC earnings guidance. Upside risk: if order delivery slows, RS could peak.
2. Large-cap Financials (GS/V/JPM): Steady inflows
On 7/27, Visa (362.53, +1.91%), JPM (356.20, +0.85%), GS, and MA all outperformed SPY. Drivers: high-rate environment extension widens NIM and lifts AUM, credit card delinquencies remain manageable, IPO and M&A restart boost investment banking revenue. GS recently hit new highs, Visa holding all moving averages — meeting the multi-period sustained strength criteria.
3. Consumer Staples (COST): COST closed 951.58 on 7/27 (+1.77%), the strongest consumer name of the day. Drivers: falling inflation, next membership fee hike expectations, AI-driven supply chain efficiency gains. Strong resilience makes it ideal as a defensive position in the portfolio.
4. Pharma (LLY leading) + Biotech (XBI): XBI 7/27 +0.07%, clearly resilient; LLY defended 1197. Drivers: GLP-1 ramp + AI pharma narrative, plus peak-rate expectations support small-cap biotech valuation repair. LLY is the most representative large-cap pharma outperformer, with 6-month RS clearly outpacing SPY.
5. Cold / Weakening Sectors (Sustained Outflows):
- Speculative Semis / AI small-caps (MU/SNDK/NBIS): Oversold bounce after prior halving, but forming lower-high structure with institutions continuing to trim.
- New energy / disruptive small-caps (CRCL/RDDT etc.): Excessive valuation, missing fundamentals, capital clearly avoiding.
Reason capital avoids: both are "news-driven speculative sectors" lacking stable earnings support; capital avoids them due to valuation digestion difficulty under high-rate environment and uncertain earnings delivery.
2. Top 10 Stocks Outperforming the Broad Market
| Ticker | Company | Industry | 6M Relative Return | Core Strength Logic | Key Fundamentals |
|---|---|---|---|---|---|
| MSFT | Microsoft | Software / Cloud / AI Platform | +15% ~ +20% | Cloud + AI dual engine, Azure 30%+ growth, OpenAI investment re-rated | TTM P/E ~35, FY26 revenue growth ~15%, GM ~69%, FCF ~$70B |
| GOOGL | Alphabet | Search / Cloud / AI | +12% ~ +18% | Gemini 2.5 upgrade, Cloud segment first quarterly profit breakout, in-house TPU reduces AI cost | TTM P/E ~27, FY26 cloud growth ~28%, GM ~58%, FCF ~$110B |
| META | Meta Platforms | Social / Ads / AI | +8% ~ +14% | AI ad targeting efficiency, Reels monetization catching up, Threads 400M+ users | TTM P/E ~25, ad revenue growth ~20%, GM ~82%, FCF ~$50B |
| AVGO | Broadcom | Semis (Networking / Custom Silicon) | +25% ~ +35% | AI ASIC order explosion (Google/Meta custom chip mega-orders), VMware acquisition profit release | TTM P/E ~65, FY26 revenue growth ~25%, GM ~62%, FCF ~$25B |
| NVDA | NVIDIA | AI GPU / Data Center | +20% ~ +30% (topping range) | Blackwell platform ramp, cloud capex cycle still strong | TTM P/E ~50, FY27 DC growth ~50%, GM ~75%, FCF ~$60B |
| COST | Costco | Warehouse Retail / Staples | +10% ~ +14% | Membership fee hike, AI supply chain optimization, steady global comp sales | TTM P/E ~55, revenue growth ~8%, GM ~12%, membership fee upside |
| V | Visa | Financial Payments / Network | +8% ~ +12% | Cross-border payments recovery, AI fraud prevention, stable high-margin business model | TTM P/E ~32, revenue growth ~10%, GM ~80%, FCF ~$20B |
| JPM | JPMorgan | Large-cap Bank | +12% ~ +18% | High rates, NIM expansion, record AUM, top-tier bank moat | TTM P/E ~13, revenue growth ~6%, ROE ~17%, stable dividends |
| GS | Goldman Sachs | Investment Bank / Asset Management | +15% ~ +22% | IPO/M&A restart, strong Trading revenue, record AUM | TTM P/E ~14, revenue growth ~10%, ROE ~13%, stable capital return |
| LLY | Eli Lilly | Large-cap Pharma / GLP-1 | +15% ~ +20% | Mounjaro/Zepbound sales ramp, pipeline progress, AI pharma narrative | TTM P/E ~65, revenue growth ~30%, GM ~80%, GLP-1 international expansion |
Sector dispersion check: Software/Cloud (MSFT/GOOGL/META), AI Semis (AVGO/NVDA), Consumer (COST), Financials (V/JPM/GS), Pharma (LLY) — maximum 3 names in any single sector (Software/Cloud), but with differentiated business models, satisfying diversification requirement.
3. Per-Stock Valuation & Trend Snapshot
| Ticker | Market Cap (USD) | TTM P/E | TTM EPS | Gross Margin | Cash Flow Quality | Support / Resistance |
|---|---|---|---|---|---|---|
| MSFT | ~$2.9T | ~35 | ~$11.2 | ~69% | FCF ~$70B, FCF Margin >30% | Support 365 / 200D MA; Resistance 400 / prior high 415 |
| GOOGL | ~$2.1T | ~27 | ~$12.0 | ~58% | FCF ~$110B, FCF Margin >25% | Support 316 / 200D MA; Resistance 340 / recent high |
| META | ~$1.5T | ~25 | ~$23.7 | ~82% | FCF ~$50B, FCF Margin >35% | Support 543 / 200D MA; Resistance 620 / 660 |
| AVGO | ~$1.8T | ~65 | ~$5.9 | ~62% | FCF ~$25B, FCF Margin >40% | Support 363 / 50D MA; Resistance 425 / historical high |
| NVDA | ~$4.4T | ~50 | ~$4.1 | ~75% | FCF ~$60B, FCF Margin >45% | Support 175 / 200D MA; Resistance 220 / prior high 230 |
| COST | ~$420B | ~55 | ~$17.3 | ~12% | Operating CF ~$11B, stable membership fee base | Support 905 / 200D MA; Resistance 980 / 1000 round number |
| V | ~$600B | ~32 | ~$11.3 | ~80% | FCF ~$20B, stable buybacks | Support 344 / 50D MA; Resistance 380 / 400 |
| JPM | ~$770B | ~13 | ~$27.4 | — | Strong operating CF, NIM expansion | Support 348 / 200D MA; Resistance 360 / prior high |
| GS | ~$200B | ~14 | ~$76.2 | — | Cyclical IB revenue, volatile CF | Support 1020 / 200D MA; Resistance 1120 / 1200 |
| LLY | ~$750B | ~65 | ~$18.4 | ~80% | FCF ~$8B, GLP-1 ramping | Support 1180 / 50D MA; Resistance 1250 / 1300 |
4. Overall Market Risk Summary
Market Backdrop: SPY closed 739.09 (+0.02%), defending 735 short-term support but without volume expansion. Market is in a "high-level consolidation, direction unclear" phase. Aggregating signals from Discord sources (Shun Ge, Mei Tou Jun, Dan Zanger, StockWhale etc.), bull-bear divergence is clear: bulls point to Q3 earnings season + Fed cut expectations; bears warn of historical Aug-Sep seasonal pullback and semiconductor profit-taking.
Hot-Sector Pullback Risks:
- AI Semis valuation overheating: NVDA + AVGO combined market cap ~$6.2T, over-weight in S&P — any earnings miss or guidance disappointment would create systemic drag on the broad market.
- GLP-1 Pharma: LLY and NOVO face simultaneous Medicare price negotiations and patent cliff risks; 65x TTM P/E already prices in optimistic expectations.
- Defense / Aerospace: ITA has run up sharply short-term; Middle East de-escalation could trigger 5-10% pullback.
- Financials: GS, JPM valuations look low (13-14x P/E), but if Fed accelerates rate cuts, NIM could reverse downward.
Common Valuation Concerns Across the Strong-Stock List:
- Average TTM P/E of the entire list is ~40x, far above S&P 500's ~22x.
- AVGO, NVDA, LLY, COST valuations depend on sustained high-growth expectations; any quarterly earnings miss could trigger sector-wide pullback.
- Recommend total position size at 60-70%, keep 30% cash for volatility; no single strong-stock position should exceed 8%.
5. Three Deep-Dive Questions for Follow-Up MCP Data Retrieval
- Sector Cycle Question: AI semis has run its primary uptrend for 18 months. Similar sector cycles over the past 5 years (FAANG 2017-2018, Cloud 2020-2021) averaged 24-30 months before peaking. Should we begin rotating NVDA/AVGO partial positions into "catch-up" sectors (defense, financials, biotech)? MCP can pull XLK, ITA, XBI, SPY 10-year monthly relative strength data to backtest rotation timing.
- Long-Term Profitability Question: NVDA, AVGO, LLY, COST in the list are richly valued — can they truly support 20%+ EPS growth over the next 5 years? MCP can pull COMPANY_OVERVIEW, INCOME_STATEMENT, EARNINGS for 10-year EPS/gross margin/ROE series, and use a DCF model to backtest whether current prices imply reasonable implied growth rates.
- Share Dilution Risk Question: Do AI concept stocks (especially AVGO with VMware stock payment, PLTR employee equity incentives, NVDA ongoing employee stock grants) carry long-term dilution risk that erodes EPS? MCP can pull CASH_FLOW for shares-outstanding changes, SBC amortization expenses, and calculate SBC/Revenue ratio and diluted EPS real growth rate.
⚠️ Disclaimer: This article is for educational purposes only and does not constitute investment advice. Investing involves risk.
