Monday, January 19, 2009

S&P 500: Then V. Now


In my continuing quest to bring you stuff that no reasonable person would look for on his/her own, I present to you the following table that shows the change in relative market cap among the sectors represented in the S&P 500. You can get this information for yourself here

While an immediate review of the percentages themselves may produce a yawn or two, if you look at the % change over 2008, the change is rather stark.. . .

  • Consumer Staples increase of 22.6%
  • Energy being weighted just higher than Financials
  • Financials DECREASING a whopping 34.6%
  • Healthcare increasing 19.3%
  • Utilities, while still less than 5%, increased 14.1%

I don't pretend to have any special knowledge of stuff, but given the weighting changes, it would seem to me that sector rotation would have lots to do with the behavior of the index when one is looking at comparisons. For example, how much further could financials fall RELATIVE to Consumer Staples? Meaning the new composition may affect onward rate of change relative to economic conditions. Accordingly, there might be some stability now in the index itself as so much of the 'hot money' was in Financials and Energy.

The S&P market cap has fallen 39.3% over the study period.

P. S. If I ever had ANY doubts about Mercury Retrograde, they were all resolved on our last dog transport: car troubles, traffic troubles, dog mix up troubles----not to mention the geese and the plane................

3 comments:

Anonymous said...

This was really interesting information. Thanks for posting it.

As for Mercury Retrograde: Hear! Hear!

~ GemmaStar

Anonymous said...

Thank you for this chart, Leisa.

Caution, rant here: in my mind, the financial services "industry" should be in the ~5% mkt cap weighting, if our economy is to return to a balanced system where genuine wealth is established via creativity and value-added work, vs. via trading of all sorts.... whether is it managing a platform, prop desk, fluky trading vehicles like "carbon credits", fee-skimming from captive money like IRA/401k/403bs, financial engineering & "products",etc.
C'mon, the majority of the intelligent people in the industry could apply their brains to real, more pressing issues. Clearly, the top tier / Wall St crowd do not add value to society commensurate with their bloated pay.

This would include me, as my career presently has me working in banking & insurance, developing solvency mgt software. Before that, we were developing credit risk software. Try not to laugh

A read of some market history tells that excessive trading and financial engineering is a characteristic of late-stage bubbles / unstable markets. We've been living in that realization for the past 18 months.

@ the new blog look... one problem that persists with Perplexed is that the content of your posts is deeper (congrats!) than a scrolling-day format of a blog. Intelligent responses can't be made in the same time frame!

~Sleepless

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