Sector Performance Via Market Capitalization (Since Steel/Aluminum Tariffs Enacted)
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View from the Observation Deck  
  1. On 3/8/18, President Trump signed orders imposing tariffs on imported steel (25%) and aluminum (10%). Since then, trade tensions with China have escalated and we believe such tensions are weighing on global growth projections and the stock market.  
  2. As of 8/26/19, the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices stood 4.87%, 9.70% and 17.52% below their respective all-time closing highs (down 20% or more from recent peak is bear market territory), according to Bloomberg.  
  3. These three indices together comprise the S&P Composite 1500 Index, which represents approximately 90% of total U.S. equity market capitalization (cap), according to S&P Dow Jones Indices. 
  4. Sector performance can vary widely by market cap. Some of the sectors reflect a significant disparity in performance (see table). The more defensive/income-oriented sectors (Utilities & Real Estate) performed the best for investors. 
  5. Large-cap stocks, as measured by the S&P 500 Index, have significantly outperformed their mid- and small-cap counterparts since the tariffs began (3/8/18).  
This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance, while the 11 major S&P 500 Sector Indices (Real Estate was added as the 11th major sector in 2016 but data is not available for this chart) are capitalization-weighted and comprised of S&P 500 constituents representing a specific sector. The S&P MidCap 400 Index is a capitalization-weighted index that tracks the mid-range sector of the U.S. stock market. The S&P SmallCap 600 Index is a capitalization-weighted index that tracks U.S. stocks with a small market capitalization. 

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Posted on Tuesday, August 27, 2019 @ 1:58 PM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.