State Street’s Chart of the Week – Coronavirus: Cyclical sectors underperform whist technology stocks rally

Please see below the latest ‘Chart of the Week’ from State Street Global Markets

Category:

Coronavirus: Cyclical sectors underperform whilst technology stocks rally

Until Monday, stock markets were surprisingly resilient to concerns that the Coronavirus was disrupting supply chains, consumer spending, and future earnings; flirting with all-time highs at the end of last week. However, the technology sector is still leading performance this year despite lower sales and earnings estimates from certain blue-chip companies, and a number of semiconductor stocks. Despite relative calm on the surface, weak performance of cyclical sectors suggested cracks were beginning to appear.

A wave of sell-offs hit the markets on Monday following a surge in Coronavirus cases in Italy. But it was not Technology stocks that suffered most. Instead, cyclical sectors struggled, with Energy, Materials and Industrials being the weakest performing sectors this year as investors worry about the economic impact of the virus. Whilst this could be in response to analysts’ negative earnings revisions, media sentiment has also turned negative, suggesting that the cyclical underperformance  might be likely to last. This implies a more rational response to risks from the stock market than appears at first glance from the market levels.

 

 

 

Investing involves risk including the risk of loss of principal.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon.  You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The views expressed in this material are the views of State Street through the period ended August 28, 2019 and are subject to change based on market and other conditions.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those set forth in State Street's 2015 annual report and subsequent SEC filings.  State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, August 28, 2019 and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

State Street Corporation One Lincoln Street, Boston, MA 02111-2900.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street’s express written consent.

© 2019 State Street Corporation - All Rights Reserved

 

Expiration date: February 28, 2021

Tracking number: 2966325.1.1.GBL.RTL

Media Contacts

Contact a member of the State Street Media Relations Team.

Social Media

Business Wire NewsHQ℠