The changing of the guard in S&P 500 leadership to companies like energy, financials and industrials
August 11, 2021
The S&P 500 is the most-watched index of large-cap US stocks. The S&P 500 experienced a strong week, with a 2.3% gain. If you want to analyze the performance of the market, you should drill down into the sectors that had strong weeks. We rank them by their relative strength; that is, which sectors had the best performance on a percentage basis?
“Alphabet (née Google), Netflix and Amazon are all up more than 35% year-to-date but as a growth group, they are outperforming top value names like Chevron, Exxon, and JP Morgan Chase by a factor of 10. The trend is even more dramatic over the past month where Alphabet (-1.4%), Amazon (-8.3%), and Netflix (-8.1%) have posted strong declines even as they have walloped the performance of top value names.
These are tough economic times for investors. That means they need to be more discerning about the companies they invest in. It also means paying attention to growth rates and profitability. It means looking at investment categories beyond just the stock market and the value of stocks. And it means understanding why market leaders are thriving and which are faltering.
The chart below is sourced from CNBC in their article “Op-ed: Market leadership is shifting. Here’s why investors should pay attention” released today. Energy is the S&P 500 sector the 1% top investors are focusing on right now. All things in the markets we are seeing is that oil is going to be going to over $100 before the end of the year.
The profit trajectory of industries that have been replaced by Covid, such as energy, finance, and manufacturing, appears to be a key sentiment from investors.
These key indices are a validation of our research team’s findings at King Operating. We have used such research to model our business operations and maximize returns to investors.