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The S&P 500 is a market-cap-weighted issue. Yet there have been times in history that the equity market has needed to right itself after listing too heavily toward a limited number of sectors and sub-industries.
For instance, Energy represented 28% of the S&P 500 before the bear market of 1980-82, vs only 2.5% today, while tech & telecom accounted for more than 40% of the S&P 500 just prior to the bursting of the internet bubble in 2000-2002 that led to a near-50% selloff in the market that required 2-1/2 years to unwind. So where do we stand on this weighty issue today?
CFRA’s webinar panelist of experts Sam Stovall, Chief Investment Strategist, Vincent Randazzo, Senior Market Analyst at Lowry Research, a CFRA technical analysis business, Angelo Zino, Head of Tech Sector, and Todd Rosenbluth, Head of ETF and Fund Research broke down these issues. Moderated by Ken Leon, Director of Equity Research.
In this session, we discussed
- Set the stage by highlighting the S&P 500’s sector and sub-industry dominance over time
- Discussed narrowing stock participation before market tops, as well as the correlation between the duration of market breadth divergences and the time it takes to reclaim former bull market highs
- Fundamentally reviewed the outlook on tech sector and the seven largest stocks that account for a whopping 25% of the S&P 500 weighting
- Covered top tech-oriented ETF investments, based on proprietary CFRA rankings
Speakers
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Ken Leon, ModeratorDirector of Equity ResearchKen Leon is Director of Equity Research at CFRA. He is responsible for analytical research as well as client servicing. As a subject matter expert, his research industries include Diversified Banks and the Housing Market, with coverage of Homebuilding, Home Improvement Retail, Home Furnishings and Real Estate Investment Trusts (REITs). Ken is a thought leader that provides ongoing in-depth research and communications to key customer segments. He is active with most media networks and leading print media, and is sought for his investment views on the large banks and housing market trends. Ken holds both a Bachelor of Science degree and an MBA from New York University. He was also licensed in the State of New Jersey as a Certified Public Accountant. |
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Sam StovallChief Investment StrategistAs Chief Investment Strategist, Sam Stovall serves as analyst, publisher, and communicator of CFRA’s outlooks for the economy, market, and sectors. He is the author of The Seven Rules of Wall Street and The S&P Guide to Sector Investing. He also writes weekly “Sector Watch” and “Investment Policy” reports on CFRA’s MarketScope Advisor platform, and maintains the Industry Momentum and Seasonal Rotation portfolios. His work is also found in CFRA’s flagship weekly newsletter The Outlook. |
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Angelo Zino, CFAHead of Technology SectorAngelo is the Head of Technology Sector at CFRA. His responsibilities include conducting research and recommending equity investments within the Technology sector, specializing in hardware and semiconductors. In addition, Angelo has extensive coverage in the “alternative technology” arena (i.e., solar, LEDS, 3D printing). Angelo was previously an Industry Analyst with S&P Global Market Intelligence and worked there from 2007 through 2016. Angelo holds an MBA in Finance from Hofstra University and is also a CFA charterholder. |
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Vincent Randazzo, CMTSenior Market AnalystVincent Randazzo, CMT, is a Senior Market Analyst at Lowry Research, a CFRA Business. Vincent produces written and recorded stock market research based on Lowry’s proprietary, statistically driven measures equity market supply/demand and breadth. He regularly interacts with top-tier clients, performing portfolio analysis while also consulting on tactical sector and industry group allocation decisions. Vincent earned a BA in economics from Drew University and has held the Chartered Market Technician designation since 2008. |
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Todd RosenbluthHead of ETF and Mutual Fund ResearchTodd Rosenbluth is Head of ETF and Mutual Fund Research at CFRA, where he leads the firm’s holdings-based research efforts. Todd publishes regular thought leadership content on equity and fixed income products, supports the quantitative fund models and interacts with clients. He also serves as a member of CFRA’s Investment Policy Committee. Todd has frequently provided ETF education at Inside ETFs conferences and been quoted in media outlets, such as Barron’s, New York Times and the Wall Street Journal. He also held the position of Senior Director of ETF and Mutual Fund Research for S&P Global Market Intelligence. |