How Did the Financial Sector Perform Last Week?
Market cap analysis
Larger-cap stocks above $10 billion make up 87.3% of the Financial Select Sector SPDR Fund (XLF). These stocks have lost 3.6% in the past one year but gained 2% during the trailing five days ending April 1. In comparison, the broad market S&P 500 ETF (SPY) surged 1.2% during the same period. Small-capped and mid-capped stocks, those under a market capitalization of $10 billion, underperformed large-capped stocks last week and gained 1%.
However, during the past one year, small caps have underperformed large caps and plunged 17.5%. The underperformance of small caps relative to larger companies during the year hints at the vulnerability in the broader market. The sense is that investors choose to stay with large caps, as they are safer bets amid uncertain global conditions.
Market cap analysis of subgroups
Large-cap banking stocks make up 47% of the XLF portfolio. These stocks lost 12.8% in the last one year while small-cap banking stocks lost 16.2%. In comparison, large-cap diversified financial services stocks lost 7.6% in the trailing one year while small-cap diversified financial services stocks lost a whopping 29.1%.
Last week, large-cap banks gained 0.4% while small-cap banks lost 2.1%. In comparison, large-cap and small-cap diversified financial services stocks lost 2.3% and 1% in value, respectively. Prologis (PLD), MetLife (MET), and Moody’s (MCO) led gains in the XLF ETF last week. These stocks gained 5.4%, 5.3%, and 5%, respectively, during the trailing five days ending on Friday.
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