Checking out how various sectors are trading relative to the S&P 500 often helps gain a better perspective on what trends are driving the market. With that in mind, the charts below detail the relative return of each S&P 500 sector vs. the overall index. Red highlights indicate sectors which have outperformed the S&P 500 over the last year, while green indicates sectors which have underperformed. In order to get a better idea of how each sector has reacted to the fall in oil prices, on each chart we have also indicated the day on which oil peaked (7/14).
As the charts display, consumer discretionary, technology, and industrials appear to have benefited the most from the fall in energy prices, while energy, utilities, consumer staples, and health care have lagged the market ever since oil’s peak. While the decline in energy is obvious, we wonder whether the decline in the other three traditionally defensive sectors is due to oil or simply the fact that investors have developed a bigger appetite for risk.
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