October So Far

The S&P 500 has fallen -4.16% this month. Here’s how the 10 industry groups have fared:
Industrials -2.13%
Staples -2.57%
Health Care -2.81%
Financials -3.09%
Materials -4.35%
Discretionary -4.63%
Tech -5.07%
Telecom -6.15%
Utilities -7.10%
Energy -8.15%

This is almost an exact unwinding of how the industry groups did from May 10 through September 30:
Energy 23.24%
Utilities 11.90%
Tech 9.39%
Telecom 1.94%
Financials 1.90%
Discretionary 1.45%
Staples 0.39%
Industrials -0.12%
Health Care -0.23%
Materials -4.16%

The question now is, has the market reversed itself for good, or are the big winners (like energy) just trenching themselves and preparing for another run-up?
I think that’s what this earnings season is all about. I’m particularly interested to see the earnings for the health care and consumer staples sectors. Those industry groups are just too good to lag the market for long.
The key will be long-term interest rates. If rates keep going higher, then I think this sector rotation may be with us for some time.

Posted by on October 13th, 2005 at 9:45 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.