U.S. Stock Market Sectors - Relative Strength

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Interpretation

The charts above display the relative strength for each U.S. stock market sector. The relative strength indicates how well a given sector performed compared to the overall stock market (as measured by the S&P 500). When the ratio rises, the sector outperformed the market - and when it falls, the sector underperformed. According to the Global Industry Classification Standard (GICS) there are 11 sectors into which S&P has categorized all major public companies.

Further information

Stock Market Sectors Overview

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Interpretation

The chart above gives a different view of the same data from the ratios above. Below are the sector descriptions according to Corporate Finance Institute.
The Energy Sector consists of all companies that play a part in the oil, gas, and consumable fuels business. This includes companies that find, drill, and extract the commodity. It also includes the companies that refine the material and companies that provide or manufacturer the equipment used in the refinement process. Companies such as Exxon Mobil and Chevron extract and refine gas, while companies like Kinder Morgan transport fuel to gas stations.
The Materials Sector encompasses companies that provide the raw material needed for other sectors to function. This includes the mining companies that provide gold, zinc, and copper, and forestry companies that provide wood. Example are Sherwin-Williams and DuPont. Container and packaging companies that are not typically associated with materials are also in this sector.
The Industrials Sector includes a wide range of companies, from airlines and railroad companies to military weapons manufacturers. Since the range of companies is so large, the sector has 14 different industries. Two of the largest industries are Aerospace & Defense and Construction & Engineering. The best known names within this sector are Delta Air Lines and Southwest Airlines, FedEx Corporation, and Boeing Company.
The Utilities Sector includes companies that provide or generate electricity, water, and gas to buildings and households. For example, Duke Energy generates and distributes electricity, and Southern Company provides gas and electricity. Many utility companies are developing more renewable energy sources.
The Healthcare Sector consists of medical supply companies, pharmaceutical companies, and scientific-based operations or services that aim to improve the human body or mind. Familiar names include Johnson & Johnson, a medical device and pharmaceutical company that owns Tylenol, and Abiomed, which manufactures medical implant devices.
The Financials Sector includes all companies involved in finance, investing, and the movement or storage of money. It includes banks, credit card issuers, credit unions, insurance companies, and mortgage real estate investment trusts (REITs). Companies within this sector are usually relatively stable, as many are mature, well-established firms. Banks in this sector include Bank of America Corp, JPMorgan Chase & Co., and Goldman Sachs. Other notable sector names include Berkshire Hathaway and American Express.
The Consumer Discretionary Sector covers luxury products or services that are not necessary for survival. The demand for these items depends on economic conditions and the wealth of individuals. Products include cars, jewelry, sporting goods, and electronic devices. Luxury experiences include trips, stays at hotels, or dining in a posh restaurant. Most companies in this sector are easily recognized. Some examples include Starbucks, Best Buy, and Amazon.
The Consumer Staples Sector provides goods and services that consumers need, regardless of their current financial condition. This includes food and beverage companies, household product providers, and personal product providers. Consumer staple companies are well known, since people see their products in stores regularly. For example, Procter & Gamble is a famous company within this sector, which produces bleach and laundry detergent under brand names such as Dawn and Tide. Another example is Kroger, which is the largest supermarket chain in the US.
The Information Technology Sector consists of companies that develop or distribute technological items or services, and includes internet companies. Technology products include computers, microprocessors, and operating systems. Example companies in this sector are big names such as Microsoft Corporation, Oracle Corp., and Mastercard Inc. This sector has seen a lot of change in recent years because of the rapid rise in technology-based companies.
The Communication Services Sector consists of companies that keep people connected. This includes internet providers and phone plan providers. The more exciting part of the sector includes media, entertainment, and interactive media & services companies. Netflix Inc. and Walt Disney Co. are considered part of the communication services sector. Other companies within this sector include AT&T, CBS Corp., and Facebook.
The Real Estate Sector was moved out of the financials sector in 2016. Therefore, due to missing historical data, it is not represented in the charts above. Example companies are American Tower Corp., Boston Properties, and Equinix.

Data Sources


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