Sector Returns and Weights

The markets have staged a massive comeback since March. Many investors and pundits do not believe the markets are behaving rationally. We have a slightly different viewpoint however. We are seeing money flow into sectors and more importantly, very specific companies that are performing well during the global pandemic including Apple, Microsoft, Google, Amazon and Home Depot. We are also seeing money flow away from companies that are not performing well due to the pandemic including energy, travel, entertainment and financials.

However, as the attached article: Sector Returns and Weights points out, only a select few companies are keeping the market afloat. The vast majority of companies are struggling to return to their pre-pandemic prices.

We expect the companies most affected by the pandemic to rally as positive results from treatments, cures and vaccines are announced. Several stage three vaccine trials are starting this week with several more beginning over the next few months.

We are hopeful that at least one of the vaccine trials produces positive results.

Until then please stay safe and healthy.