Major companies include Berkshire Hathaway (NYSE: BRK.A, BRK.B), JPMorgan Chase (NYSE: JPM), and Citigroup (NYSE: C). In addition to banks, this group includes financial services firms, insurance companies, and consumer finance companies. The Financial sector gained 13.4% in Q4, and slightly outperformed Materials for the year with a loss of 10.6%. Among its largest components are DowDuPont (NYSE: DWDP) and Sherwin-Williams (NYSE: SHW). This sector includes companies that produce chemicals, construction materials, metals and mining, and paper and forest products. The Materials sector was next with a gain of 15.0% in Q4, but it lost 12.3% for the year. Important constituents of the Industrials sector include Boeing (NYSE: BA), 3M (NYSE: MMM), and Honeywell (NYSE: HON). Industrial sector component industries include building products, construction and engineering, electrical equipment, conglomerates, machinery, and aerospace/defense. For the year the sector was down 5.6%, which was good for 5th place among all sectors. The Industrial sector had the second-best Q4 with a 19.1% return. Chevron (NYSE: CVX), ConocoPhillips (NYSE: COP), EOG Resources (NYSE: EOG), and Schlumberger (NYSE: SLB) are major components of the energy ETF. No other sector came close to matching the Energy sector’s performance. Energy returned 22.7% in Q4, and for the year it was in a class of its own with a total return of 64.3%. The top performer for the quarter, the Energy sector, was also the top performer for the year. The 11 Select Sector SPDRs represent the S&P 500 as a whole. These sectors are Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Materials, Real Estate, Technology, and Utilities. Select Sector SPDRs are targeted exchange-traded funds (ETFs) that divide the S&P 500 into 11 sector index funds. Note that all returns discussed here are total returns, which include the effect of dividends paid during the year. This week, let’s dive into the Q4 2022 performance, sector-by-sector. The S&P 500 was up 7.1 % for the quarter, but was down 19.4% on the year. Ten of eleven sectors were up in Q4, but only two sectors had a positive return for the year. However, the fourth quarter of 2022 provided a lot of reason for optimism. Unless you are heavily invested in the energy sector, this is going to be a year you will want to forget.
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