The biggest loss in the stock markets last week was recorded by the energy, healthcare and commodities sectors, which would have the most to profit from a bounce in the markets.
Buying these three S&P 500 stocks and the 12 sub-sectors, which saw a drop in the markets last week, is a strategy that hit the market recently and caused some investors to shake. The stock markets saw notable gains, with the S&P 500 Index gaining 0.6%, to trade at 2,635 points.
According to economists, the market dropped through correction levels by 10% after only 13 days, well below the 64-day average. They noted that this is the quickest correction in the last 73 years. History shows that after six months of correction, the Standard & Poor’s was up by 22%, while the top three sectors outperformed their gains, averaging 24%. In the corrections since 1990 there has been a greater performance advantage when looking at the 12 worst-performing industrial sectors.
During the recent selling in these sectors, energy fell by 14%, health care by 11.7% and materials dropped by 10.6%. Among the sub-industry sectors were semiconductor equipment which fell by 18.8%, and then life insurance and health insurance at 15.9%. Health care supplies and oil and gas exploration and production declined by 15%. Air cargo and logistics also fell by 13.9%.
The Standard & Poor’s Index fell nearly 12% on the day before Friday’s bounce and fell 10.2% on a closing basis as of Thursday. If the were to continue the correction, the S & P may record an average correction of 14%. Stocks that could benefit from spending on infrastructure have also fallen drastically. Building materials prices fell by 13.6% and construction machinery and heavy truck trucks fell by 13.3%.
21st Century Fox: said it will maintain Sky News for at least five years, in addition to creating an independent news service. The pledge comes as part of Fox’s bid to buy the remaining 61% of the independent television operator.
Amazon: bought Blink, manufacturer of home surveillance cameras last year, but the main selling point in the $90 million deal was the company’s energy-saving chips.
Alibaba: has signed a license agreement with Walt Disney, which allows the Youku video platform to stream a collection of animations by Disney.
Disney: has raised the prices of some of its entertainment tickets by nearly 9%.
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