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Two stock market sectors to avoid for now

Jay Kaeppel
2026-07-28
Sometimes, knowing where NOT to invest can be just as valuable as knowing where to invest. Both the Metals and Mining sector and emerging markets are soon entering unfavorable seasonal periods. History suggests that investors should look elsewhere for opportunities for now.

Key Points:

  • The S&P Metals and Mining Index (XME) and the MSCI Emerging Markets Index (EEM) are soon entering unfavorable seasonal periods
  • The message is not so much that these sectors are likely to decline and that traders should look to play the short side
  • The more meaningful message is that investors can likely find better opportunities elsewhere for the time being

Ticker #1: Metals and Mining (XME)

The SPDR Metals & Mining ETF (XME) tracks the S&P 500 Metals and Mining Index. The chart below displays the annual seasonal trend for ticker XME. Note the seasonally unfavorable period between Trading Day of Year (TDY) #145 and TDY #191. For 2026, this period extends from the close on July 31st through October 6th.Two stock market sectors to avoid for now

Note also that August and September are the most typical trouble spots for this index.

Two stock market sectors to avoid for now

The chart below shows the hypothetical growth of $1 invested in XME only during this seasonally unfavor

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