Roller Coaster
The last few months have been a roller coaster.
As quickly as the markets descended in March (-34% in just over a month), the markets rallied in April and May (+45% in the two months that followed). The S&P500 came within about 4% of it’s all time high and just touched where it opened the year on January 2nd.
The S&P500 is a broad index of 500 different companies and is generally used as a proxy for “the market”. However, 6 big technology names (the FANMAG stocks: Facebook, Amazon, Netflix, Microsoft, Apple, and Google) alone make up about 23% of the index and the technology sector accounts for the majority of the performance so far this year.
While the S&P500 has found significant support as an index, it doesn’t tell the whole story of the health of the market. There are 11 total sectors within the S&P500, and when we look at those sectors, in addition to small, mid-sized, and international companies, we have a better view of just how the global equity “market” is doing this year. At the risk of sharing too much information, below is just how the various equity sectors and indexes have fared in the first half of the year:
S&P500: (500 Large-Cap US Stocks): -4.55%
----------
Technology: (Includes Microsoft and Apple): +12.99%
Communication Services (Includes Netflix and Facebook): +2.35%
Consumer Discretionary (Includes Amazon and Home Depot): +1.04%
Health Care (Includes Gilead and CVS): -3.09%
Consumer Staples (Includes Clorox and Costco): -7.4%
Materials (Includes Sherwin-Williams and DuPont): -10.05%
Real Estate (Includes Public Storage and CBRE): -11.25%
Utilities (Includes WE Energies and American Water Works): -13.7%
Industrials (Includes UPS and American Airlines): -17.28%
Financials (Includes Bank of America and Allstate): -23.36%
Energy (Includes Exxon and Haliburton): -37.01%
----------
FTSE All World Index (International Stocks) – 10.03%
S&P400 (Mid-Cap US Stocks): -14.25%
S&P600 (Small-Cap US Stocks): -19.86%
With a number of risks on the horizon including renewed concern about Covid 19 and the economic fallout, an upcoming presidential election, and social unrest globally, it would be prudent to expect market volatility to remain and the recession we are currently in to continue.
It will be just as difficult to predict what the 2nd half of the year will bring as it was the first. As always, we want to keep a disciplined investment strategy seeking to project short term cash needs while taking advantage of long term market opportunities in both up and down markets.
If you have any questions or need me for anything, please do not hesitate to reach out.
The information given herein is taken from source that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities, LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but is not guaranteed by us as to accuracy or completeness. This is for information purposes only and in no event should be construed as an offer to sell or solicitation or an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without IFP's express prior written consent.