Odd Data Point: Tech Passes Finance in SPX
How is this for an odd data point? Bank stocks are no longer the largest industry group in the SPX, having been recently bypassed by Technology.
That's according to this article by Bloomberg News:
"Bank stocks lost their position as the biggest industry group in the Standard & Poor's 500 Index to technology companies after tumbling 31 percent since 2006.
Computer and software makers led by Microsoft Corp. and International Business Machines Corp. accounted for 16.26 percent of the benchmark for large U.S. companies based on yesterday's closing prices. Financials, led by Bank of America Corp. and JPMorgan Chase & Co., fell to 16.19 percent.
Banks slid the most among 10 industries in the S&P 500 last year [-21%] and are the worst-performing group so far in 2008, as lower U.S. real-estate prices led to losses on mortgage debt and derivatives approaching $380 billion globally...
Financial shares in the index declined almost 21 percent in 2007, their worst year since a 24 percent drop in 1990. They have plunged 31 percent since the end of 2006."
I saw that and wondered if this might be some sort of a contrary indicator. I may actually have to pull all of the prior leadership changes in the SPX500, and other indices, and see if there is any significance. I would be curious to see if perhaps there might be a paired trade (i.e., Long Finacials, short Tech)
Regardless, in the S&P500, its now Banks #2, Tech #1.
>
Source:
Drop in Bank Stocks Leaves Technology Biggest S&P 500 Industry
Elizabeth Stanton
Bloomberg, May 21 2008
http://www.bloomberg.com/apps/news?pid=20601213&sid=adD4MfoIscYo&
Wednesday, May 21, 2008 | 10:50 AM | Permalink
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So the S&P500 performance over the last year would be worse, significantly worse, if they hadn't been re-jiggering their composition? That's what I'm hearing in this post.
It's must be a Bullish indicator. Buy More Stock!
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BR: Not rejiggered -- the change was due to market cap weight as banks dropped . . .
Posted by: VoiceFromTheWilderness | May 21, 2008 11:04:41 AM
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