What The Distribution Of S&P 500 Sector Weightings Seem To Say

Bespoke has a nice depiction in the distribution of weightings among different sectors constituting the US S&P 500.

Bespoke writes,

``Technology is currently the biggest sector in the index at 18.9%, and it has been the biggest since it overtook the Financial sector early on in the financial crisis. There has been quite a bit of movement in sector weightings in recent years. At the bear market low in March 2009, the Financial sector made up just 8.9% of the index. It has charged back since then and has nearly doubled its weighting to 16.3%. Consumer Discretionary, Industrials, and Technology are the only other sectors that have increased their weightings during the current bull market. Health Care has really dropped off, going from 16.1% at the bear market low to its current level of 11.8%. Energy has also dropped quite a bit from 14.3% to 11%. There are now five sectors with weightings that are between 10.5% and 11.8%. Utilities, Materials, and Telecom continue to have very low weightings, and combined they still make up less than the 7th largest sector. The performance of any of these three sectors has a very minimal impact on the overall direction of the market." (bold emphasis added)

Some observations:

-The steady growth of the technology sector, and its apparent leadership today appears to reflect on the fast evolving US economy into the information age.

-The recent upsurge of the financial exhibits massive inflationism

-who says the US consumer is dead? Consumer discretionary outperformed the others, second only to financials based on the changes on March 2009 and the current

-the growth of in the industrials also suggest that the US economy is seeing some 'progress'

-at the current circumstance, there is a tight competition in 5 sectors: health care, consumer staples, energy, consumer discretionary and industrials, where I think energy has been underappreciated.