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Relative performance of global sectors during 2008

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My pal Mike Panzner points out that "Not surprisingly, defensive groups have been the star relative performers on a global basis during 2008.

Wednesday, October 22, 2008 | 12:00 PM | Permalink | Comments (21) | TrackBack (0)
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Comments

Does this mean Health Care is down ONLY half as much as the market, that is comforting.

Posted by: garthdbrown | Oct 22, 2008 12:05:47 PM

You might add the performance of gold and USD since July 15:
Gold -21%
USD +17%
(using last nights prices)

Gold down and USD up = deflation
Will the 30 TBond stop at 4% again?

Great stuff.
Go Barry I'm swinging at them with ya...

Posted by: rdub | Oct 22, 2008 12:08:55 PM

look at the healtcare etfs; they are all down; how is the index in the chart calculated?

http://finance.yahoo.com/q/bc?t=1y&s=IYH&l=on&z=m&q=l&c=ihf%2Cixj

Posted by: nik | Oct 22, 2008 12:13:01 PM

Something is going down.
Look at all the currencies (except yen)
Everybody is buying USD at a huge premium.
Why?

Posted by: DoktorD | Oct 22, 2008 12:23:36 PM

Notice that Financials have barely fallen below their July bottom.

Posted by: Tom K | Oct 22, 2008 12:23:44 PM

I just looked at a chart of the weekly price of oil since 2002. I forgot how parabolic the run up has been for the past 6 years. My attention had only been towards the past 2 years or so, where it plateaued for a while.

Hmmm, I wonder if the fall in oil prices will be even more severe than I thought earlier. Will the new cost approximate an actual industry average plus delivery charges and a normal profit? If so, the world is about to get a lot more interesting. Will oil producers, as in oil producing nations, start running deficits if they are high cost producers and their fund commitments cause them to be overextended?

Since easy credit and an abundance of investors starting driving the price higher several years ago, I suppose there is no logical reason for oil to stop at an arbitrary number in the $50s. I think there is a good change we will see an actual textbook competitive market appear in oil for a few months real soon.

Pardon my smirks.

Posted by: dead hobo | Oct 22, 2008 12:26:55 PM

Like Steve Roach once said:

"History tells us that commodity prices have some of the greatest mean-reverting tendencies of them all."

One of my students asked me a few weeks ago, "Do you think oil will ever be below $60 a barrel again?" I told her "Yes - but you won't like it."

Posted by: Uncle Jeffy | Oct 22, 2008 12:40:11 PM

Re the price of oil,

If it falls far enough, I might not put a few bucks back into the energy sector, as I had planned to do earlier. They might become a great sector to avoid until they get pricing power back again.

Posted by: dead hobo | Oct 22, 2008 12:44:23 PM

I wonder how long health care can remain a leader; today's NY Times has a front-page story that people are dropping their medications because they can't afford them. And about 10 days ago there was a similar story about people not going to the doctor like they used to, for the same reason.

Posted by: Dan | Oct 22, 2008 1:05:29 PM

RE RE The price of oil:

Taking it a step farther, this also means that inflationary pressures are now, or very soon will be, completely removed from the world economy. The EU can start to lower rates, as can everyone else who raised them due to the credit expansion. That's got to do something to spark things up.

Now, who does well in a world with low oil prices and low inflationary pressures? Answer, almost everybody. The races will begin again sooner than you think. It's time to start staking out your claims. They will start to disappear in a few weeks and go quickly when the EU makes some announcements. I bet even housing will start to look good again.

Posted by: dead hobo | Oct 22, 2008 1:11:39 PM

Dan @ 1:05:29 PM

Health care is a tricky one. All sorts of regulations and (perhaps) price controls on the horizon.

Posted by: DL | Oct 22, 2008 1:32:51 PM

There's no such thing as defense with deflation.

That chart says short heathcare.

Posted by: John Borchers | Oct 22, 2008 1:34:32 PM

With the price of oil as it is, one has to wonder if these two have the same meaning in mind with their chanted mantra of "Drill, baby, drill". - John and Sarah McLaska

Posted by: Winston Munn | Oct 22, 2008 1:37:21 PM

@JB: I had the same thought about health care. Bought a small amount of RXD today.

Health care will ultimately be the last sector to tank. Might need to be patient on this one but I gotta believe it will happen.

Posted by: Jeff M. | Oct 22, 2008 1:44:53 PM

I love people who sell options. If they only had a clue as to their folly.

Posted by: derivs | Oct 22, 2008 1:54:12 PM

Just wondering: I am trying to replicate the graph and see that the S&P Global Healthcare (SGH)is down -21.1% from 12/31 thru 10/21, and the S&P Global 1200 (SPGLOB) is down -37.4%.

I dont see how the relative outperformance is calculated (+45%)?

Posted by: Samuel Covert | Oct 22, 2008 1:59:11 PM

Don't understand why basic materials performance should surprise you. They're highly cyclical (and I was and continue to be short them), and materials stocks regularly rise tremendous (500, 600%) and then drop 90+% during cycles. We saw the 500-600% rise, now we're on the 90+% drop cycle. It's not different this time. BRIC demand is falling off the cliff like everywhere else, and credit is scare for these hugely capital-intensive industry. I hope you don't think materials have bottomed. We have another 20-40% downside from here.

Posted by: David | Oct 22, 2008 2:17:28 PM

Henry Paulson announced a new program this afternoon, news is just hitting the wires...

He called this new program Government UPSETS

Unsound
Programs
Should
Energize
Those
(who are)
Stupid....

This program is designed after the old communist work programs..."We pretend to work and they pretend to pay us..."

These programs, Mr. Paulson said, "We think may possibly work, and we think the general population may possibly think the way we do....."

Back to your regular depressing economic news....

Posted by: Bruce in Tennessee | Oct 22, 2008 2:49:07 PM

Funny thing is, homebuilders are one of the best groups YTD...

and happy Birthday to Barry...

Posted by: Jay Weinstein | Oct 22, 2008 3:16:40 PM

I am using Factset to attempt to replicate the graph as well and my numbers do not match those listed in this graph. What does the backup data for this graph look like? I was unable to calculate an S&P Global 1200 for healthcare, but the S&P500 healthcare index (identifier: SP565) shows a decline of -23% YTD (409.70 @ 12/31/07 to 315 on 10/21/08) versus an S&P Global 1200 (identifier SQUFK) decline from 1770.6 on 12/31/07 to 1080 on 10/21/08 a decline of -39%, or an outperform for Healthcare relative to S&P Global 1200 of 16%.

How is this data being calculated? I also found differences in Telecom (the only other one I looked at)...

Posted by: PMK | Oct 22, 2008 3:27:56 PM

Oil people get in office. Oil and war goes up. Oil people leaving office. Oil and war goes down. You don't need a phd to figure this out.
The dollar isn't going up. The assets of the wealthy inflated by liquidity are going down.
Common sense has been in a bear market but it is now in a bull market.
I like it.

Posted by: AGG | Oct 22, 2008 4:07:49 PM