Which Sectors Are Still OK For Q4?
A bit of pressure has been bugging the markets over the last month as investors cope up with some advisory news but regardless of what the financial media says, the third quarter of 2016 incomes are pretty solid. With 3.9 percent increase in earnings and revenue growth at +2.5 percent.
The fourth quarter is indeed showing a great potential however, there are several substantial market moving events to consider. These events includes the U.S. presidential race in November, the likelihood of a rate climb by the Federal Reserve in December and constant geopolitical ambiguity in many parts of the world.
To help you get a better grasp on where to keep in your mind over the next few months to help you form your market outlook here are some data for EXPECTED growth by sector for the Fourth Quarter of 2016.
We have Consumer Discretionary at +3.5% as of 11/4, vs. expected growth of 7.9% as of October.Consumer Staples having a fall of +8.3%, vs. +9.3% as of October 1.
Going to Energy we have +2.9% vs. +2.5%.Even though crude oil is down, Energy earnings could be better in the fourth quarter.
We have an increase in Financials with +15.4%, vs. +13.7%.
A huge blow for Health Care with +6.4% vs. +8.3%. The drug distributor stocks have become devastated however, the sector revision's not yet worrying.
In Industrials we have a huge downfall with -2.6% vs. +2% as of October 1 as well as Basic Materials in +7.3% vs. +21.7% as of October 1.
Another downgrade for Real estate having +2.5% vs. +4.1%.
Breaking the streak is Technology with +7% vs. +6.1.
We have Telecom at -0.3% vs. +2.1% as of October 1.
Utilities plummeting to +11.1%, vs. +16.7% and S&P 500 with +6.6% vs. +8.3% as of October 1.
To cut the story short, Technology and Financials are presentingan ascending revisions to the Fourth Quarter of 2016 earnings which is uncommon of the usual pattern. These two sectors are thebiggestover weights for patrons, but ittruly that has been the scenario for most of this decade.