U.S. Largecap Sector Relative Fair Values

Comments:  There were several changes in fair values due to new earnings data that came available post-April. As a result, market relative valuation has increased slightly by 0.5 percentage points to 94.6% FV creating an expectation for the next 12 months of 19,457. This is approximately 15 DOW points down from previous expectations.

All-in-all the week was a non-event. Four of the ten sectors moved up some level of fair value with six declining.

Consumer Staples (XLY) continued to advance from last week adding another percentage point reaching 103.5% FV.

Information Technology (XLK) was the big gainer at 95.2% FV up from 93.3% FV.

Health Care (XLV), and Financials (XLF) all advanced modestly. Utilities (XLU), Telecommunications (IYZ), Materials (XLB), Industrials (XLI), Energy (XLE), and Consumer Discretionary (XLY) all gave up some relative value but nothing significant. All of these were less than a 1 percentage point move in fair value. Health Care remains the most undervalued sector.

Screen Shot 2016-05-09 at 9.46.30 AM