U.S. Largecap Sector Relative Fair Values

Comments: Market valuation has dropped by 1.6 percentage points to 93.1% FV creating an expectation for the next 12 months of 19,512. This is approximately 211 DOW points down from previous expectations. Seven of the ten sectors gave up some level of fair value with three advancing. Since we like to talk about good news first let’s examine the advancers first. Consumer Staples (XLY), Telecommunication Services (IYZ) and Utilities (XLU) all advanced with Utilities being the big winner at a 2.2 percentage point advance to 105% FV. Telecom was not far behind with a 1.2 percentage point advance reaching 102.5% FV. Materials made a significant retreat of 2.8 percentage points but remains slightly above fair value at 101.0% FV. Industrials moved in a similar manner loosing 2.8 percentage points to fair value ending at 102.6% FV.

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