Chart of the Week: Halftime

As we are now about halfway through companies reporting their second quarter earnings reports, we wanted to take a look at how different sectors of the market have performed. While earnings growth has been strong overall, there have been wide swings in stock prices upon the release of their financials. The most notable occurrence of this earnings season has been the performance of the technology sector which has been plagued by sizable selloffs in big names such as Netflix, Facebook, Twitter, and Intel.

Chart Halftime

While many of the moves in these names were brought on by company-specific issues, they still have the ability to throw a blanket of negative sentiment over the whole sector. Energy, materials, and industrials have performed well despite the threat of trade disputes with many of the U.S.’s major trading partners. Financials kicked off earnings season with good numbers as they have been able to widen the margin on what they are taking in on loans and paying out on deposits, as interest rates have risen. Several large healthcare names such as Johnson & Johnson and Novartis performed very well on the back of significant growth in their brand name drug portfolios. However, the cloud of uncertainty around rebating remains a concern for pharmacy benefit mangers and wholesalers. The real estate sector has begun to feel the pressure of increasing labor costs as well as on input materials and appliances. Consumer staples are still being weighed down by shifting consumer dynamics and could start to see headwinds from rising raw materials costs. Earnings season is still in full swing, and we are paying close attention to not only how companies performed in Q2, but also their guidance for the rest of the year.

All indices are managed, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges or expenses. Past performance does not guarantee future results.