Showing posts from November, 2022

S&P500 sector performance 2022 YTD (Q1-Q3)

As of end of Q3 of 2022, here is how the s&p500 sector performance looks: Source: Visual Capitalist , Who would have thought communication services would be the worst YTD so far? I never would have. Communications, especially media companies, is sensitive to the economy but telecom/cable/etc tend to be more stable so this sector usually does badly but is not the worst during bear markets. There are two reasons communications has underperformed: Recession/economic slowdown: Although the US economy is doing ok, the market is pricing in major slowdown. In particular, market is forecasting big declines in advertising revenue for media companies. This makes sense given that stock markets usually lead actual recessions by something like 6 months. High leverage: Telecom companies leveraged up to crazy levels and riding interest rates adversely impact them. Although the smarter ones (like Charter) took