Chart o’ the Day: Tech, Banks and Health Care are half of the US stock market

 

My firm’s Director of Research, Michael Batnick, has been looking at S&P 500 sector composition recently.

Below, you can see the evolution of this stuff just over the last few years:

image (4)

Now watch financials and energy shrink on the backside of the financial crisis / global recession:

image (5)

Here we are in the midst of the furious bull market two years ago:

image (6)

Which brings us to 2015.

The chart below is via the Goldman Sachs Global Weekly Kickstart, a look at the sector composition of the major global stock markets:

Screen Shot 2015-10-20 at 10.30.45 AM

Add up US market cap attributed to the top three sectors, Tech, Financial and Health Care and you see that Corporate America is not quite as dynamic as maybe you’d have otherwise thought – at least by this metric. It should be noted that tech and health care stocks tend to have some of the higher valuations, given their outsized earnings growth relative to the rest of the market in recent years.

Then you think about the fact that Energy and Materials combined make up just over 10% of the US stock market (and just over 11% of the world’s). Meanwhile, tech capitalization is now over a fifth of the total market and growing. Financial sector weighting has also begun growing back into its former self and health care is gaining in importance too.

When people talk about what “the market” is doing, half of what’s happening is fairly concentrated sector-wise.

Source:

Global Weekly Kickstart
Goldman Sachs – October 19th 2015

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. royal bank login commented on Jan 03

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2015/10/20/chart-o-the-day-tech-banks-and-health-care-are-50-of-the-us-stock-market/ […]