April 2021

S&P 500 Sector Breakdown: Industrials

We’ve made our way to the industrial sector of the S&P 500, comprised of manufacturers and transportation companies. There are fourteen industries involved in the industrials sector that include railroads, airlines, military weapons, and industrial conglomerates. In 2019, the sector was “the sixth most heavily weighted of the 11 sectors.”1 

Industrials has been a hot topic this year as we saw the sector struggle as we moved into March of 2020. In the wake of the coronavirus, companies like Boeing, American Airlines, and GE took a big hit. “The industrials sector was the largest detractor to the improvement in earnings for the fourth quarter [of 2020].”2 However, there has been a 23% increase over the past six months.3 

We had many retail and young investors come in looking to buy a piece of the airline companies, expecting them to recover. That’s what makes a market. There’s always a bear and a bull. Someone believes it’s going up and someone believes it’s going down. If we dive into the industry sector specifically, we notice that it makes up 9.7% of the S&P 500, so it’s still an important piece of your portfolio puzzle.  

We’ll see over the next several months where it’s headed and whether the bear or bull has the day. It’s very possible we could see a rotation in the industrials sector. One thing’s for sure, it’s important to monitor and protect your assets tied to the stock market – that’s where we come in. We have the tools and knowledge to help you navigate the market and answer any questions you have. Let’s find the right investment strategy for you today! 

  1. https://www.spglobal.com/spdji/en/education/article/sector-primer-series-industrials/ 
  1. https://markets.businessinsider.com/news/stocks/stock-market-outlook-positive-profit-growth-first-time-since-pandemic-2021-2-1030056271 
  1. https://www.barrons.com/articles/buy-fedex-industrial-stocks-economic-recovery-51612486333 

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Hoffman Financial Group, Inc. use of the "like" button is not an endorsement of the organization or individual who posted the content. All content, "likes", and followers of this page should not be considered as testimonials or advertisements.