Market Overview

3 Sectors Lagging The S&P 500 By A Huge Amount

3 Sectors Lagging The S&P 500 By A Huge Amount

The S&P 500 index continues to trade near historical all-time highs but that doesn't mean every sector within the index is trading in the green for 2017. Quite the contrary, three sectors within the index are lagging the index by the widest margin seen in decades, according to Fundstrat Global Advisers.

As a whole, the S&P 500 index and the SPDR S&P 500 ETF Trust (NYSE: SPY) is up around 9 percent this year, but energy (Energy Select Sector SPDR (ETF) (NYSE: XLE)), telecommunications services (iShares Dow Jones US Telecom (ETF) (NYSE: IYZ) and financial sectors (Financial Select Sector SPDR Fund (NYSE: XLF))are all down by an average of 7.7 percent. In fact, this under-performance represents the largest gap dating back all the way to 1990, and over the past three decades, the bottom three performing sector have never been energy, telecommunications services, and financials.

The Other Side Of The Story

While the three sectors are underperforming the broader index, this is occurring after a major runup, especially in the first quarter of last year, S&P Global's Erin Gibbs said during a recent CNBC "Trading Nation" segment.

Of particular note, the financial sector is "coming off froth valuations" after a notable 20 percent rally in the fourth quarter last year. Energy stocks can't be faulted as it is merely following the decline in oil prices while telecoms and other high dividend yielding sectors are seeing investors exiting their positions.

Given the underperformance so far in 2017, the three sectors are now approaching "reasonable valuations and reasonable pricing," Gibbs added.

Related Links:

Pro: It'd Be A Mistake For Investors To 'Hit The Exits' Now

The Factors That Could Be Moving Short- And Long-Term Buyers

Posted-In: CNBC energy Erin GibbsSector ETFs Top Stories Media Trading Ideas ETFs Best of Benzinga


Related Articles (IYZ + SPY)

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial
Book A Demo
Learn How You Can Succeed In The Market With Benzinga Pro

Fastest Market News

Real-Time News Alerts

Customizable News Filters

Book A Demo

A New Reality: Triple-Digit Gains For 2017 Possible For Virtual, Augmented Reality

What Trump's Air Traffic Initiative Means For Travelers