“The Market” Isn't One Thing: Watching Sectors Take Turns

A developer used the EODHD MCP server connected to Claude to pull yearly returns for the eleven SPDR sector ETFs from 2021 through part of 2026, showing that the best and worst sectors diverged by more than 100 percentage points in a single year (Energy +64.3% versus Communication −37.6% in 2022). Across five year-to-year handoffs, last year's winning sector averaged roughly fourth place the next year and last year's loser about sixth, close to a random draw, so the author cautions that five handoffs are far too few to establish a rotation pattern.

Python for programmers, prompts for data analysts. "The market was up 20% this year" is one of the most compressed sentences in finance. It blends technology companies, oil producers, banks, utilities, and drugmakers into a single number — as if they all moved together. They don't. Some years one corner of the market carries everything; other years that same corner drags. Traders call the pattern "sector rotation." Let's pull the eleven sectors apart and watch who led, who lagged, and whether last year's winner tells you anything about next year's. Want to try this yourself? The EODHD MCP Server <https://eodhd.com/financial-apis/mcp-server-for-financial-data-by-eodhd?via=jsmrd&\<br\ %0Autm source=medium&utm medium=post&utm campaign=the-market-isnt-one-thing-watching-sectors-take-turns&utm content=Jaroslav is what pulled the data above — connect it to Claude and ask your own questions affiliate link . New here? The Setup https://medium.com/codetodeploy/the-setup-everything-you-need-before-your-first-prompt-1faeeff94263 covers everything you need before your first prompt. 🟧 PROMPT Use the eodhd MCP to get yearly returns for the eleven SPDR sector ETFs from 2021 to today, and show the best and worst sector each year. Best and worst sector, year by year: 2021 — Energy XLE +53.3% · Communication XLC +16.0% 2022 — Energy XLE +64.3% · Communication XLC −37.6% 2023 — Technology XLK +56.0% · Utilities XLU −7.2% 2024 — Communication XLC +34.7% · Materials XLB +0.2% 2025 — Technology XLK +24.6% · Consumer Staples XLP +1.5% 2026 so far — Energy XLE +42.8% · Consumer Discretionary XLY −7.0% Look at 2022 alone: the best sector gained 64%, the worst lost 38%. That's a gap of more than 100 percentage points, within the same "market" and the same twelve months. Any single number describing "how the market did" that year was an average of two completely different experiences. For each year, where did the previous year's best and worst sector finish the following year? Last year's best sector, ranked the next year out of 11 : Energy, best in 2021 → 1 in 2022 Energy, best in 2022 → 9 in 2023 Technology, best in 2023 → 5 in 2024 Communication, best in 2024 → 2 in 2025 Technology, best in 2025 → 2 in 2026 so far Last year's worst sector, ranked the next year: Communication, worst in 2021 → 11 in 2022 worst again Communication, worst in 2022 → 2 in 2023, up 52.8% Utilities, worst in 2023 → 4 in 2024 Materials, worst in 2024 → 7 in 2025 Consumer Staples, worst in 2025 → 6 in 2026 so far There's no clean rule here. Energy won two years running, then fell to ninth. Communication finished last two years in a row, then jumped to second with a 53% gain. Across these five handoffs, last year's winners averaged roughly fourth place the following year, and last year's losers averaged sixth, which is about where a random draw would put them. Five handoffs is far too few to call that a pattern. What the table shows clearly is how fast the order reshuffles, and how badly "buy whatever led last year" or "avoid whatever lagged" could have gone in the wrong year. Chasing 2022's winner meant riding Energy into a flat 2023. Abandoning 2022's loser meant missing Communication's rebound. A few things about this comparison deserve naming. Calendar years are an arbitrary way to slice the data. Measure the same eleven sectors from July to July, or quarter by quarter, and the winners and losers would shuffle differently — some of 2022's 100-point gap between Energy and Communication came from where January 1st happened to fall. The pattern of sectors taking turns holds up; the exact rankings depend on where you draw the lines. The window is also short: under six years, five year-to-year handoffs. That's enough to show how much the order moves, and nowhere near enough to prove whether it moves randomly or follows a cycle. People who study sector rotation seriously look at decades of data, alongside interest rates and the business cycle, and still argue about how predictable it is. And a sector ETF is less diversified than its name suggests. XLK, XLC, and XLY are each dominated by a handful of giant companies, so "Technology had a great year" can mostly mean "two or three stocks had a great year." Treat each line in the table as the story of a few heavyweights, not of an entire industry. Not investment advice. This is the thirty-second article in the series Unlock Real-Time Market Intelligence with EODHD and Claude <https://medium.com/\<br\ %0Acodetodeploy/unlock-real-time-market-intelligence-with-eodhd-and-claude-6f431c82c525 , and it takes apart a number every other article has quietly leaned on: "the market." Two prompts split one index into eleven sectors, then checked whether the leaders stayed in front. So here's what they found: in 2022, the best sector gained 64% and the worst lost 38% — a gap of more than 100 percentage points inside the same market, in the same year. And the sector that finished last that year finished second the next. "The market" is an If this made you curious, the MCP Server <https://eodhd.com/financial-apis/mcp-server-for-financial-data-by-eodhd?via=jsmrd&\<br\ %0Autm source=medium&utm medium=post&utm campaign=the-market-isnt-one-thing-watching-sectors-take-turns&utm content=Jaroslav is free to try — The Setup https://medium.com/codetodeploy/the-setup-everything-you-need-before-your-first-prompt-1faeeff94263 walks you through it. ← Part 31: Before You Panic About Insider Selling, Check the Code <https://jaroslav-smarda.medium.com/\<br\ %0Abefore-you-panic-about-insider-selling-check-the-code-2524e2e7d45b