S&P 500 Sectors Relative Valuation

During the first two weeks of May, investors decided to take less risk and switched off the risk on/off switch. The forward P/E of the S&P 500 declined from 13.2 during the last week of April to 12.8 during the May 12 week. Relative to the market’s multiple, there have been some big swings in the valuation multiples of the various sectors of the S&P 500 in recent weeks. The biggest losers have been Energy with a drop from 1.01 to 0.84 over the past 12 weeks and Materials with a decline from 1.04 to 0.98 over the past 13 weeks.

The big winners are Consumer Staples (from 1.04 to 1.14 over the past 13 weeks), Health Care (from 0.84 to 0.95 over the past 12 weeks), Telecommunication Services (from 1.16 to 1.29 over the past 17 weeks), and Utilities (from 0.94 to 1.06 over the past 13 weeks).

Ticking slightly higher recently have been Consumer Discretionary and Information Technology. Edging lower has been Financials.