Last earnings season, S&P 500 stocks did well while non-S&P 500 stocks struggled. So far this earnings season, the opposite has taken place. A total of 250 stocks have reported earnings since Alcoa (AA) kicked things off earlier this month. These stocks have averaged a one-day change of -0.09% on their report days. As shown below, however, S&P 500 stocks have been the ones heading lower, averaging a one-day decline of 1.06% on earnings. Non-S&P 500 stocks, on the other hand, have actually averaged a gain of 0.47% on their report days.
The weakness for S&P 500 stocks is apparent when looking at one-day performance by sector as well. Below we highlight the average one-day change on earnings for sectors that have had at least 10 stocks report this season. The average S&P 500 Materials stock that has reported has declined 3.19% on its report day, but non-S&P 500 Materials stocks have gained 0.50%. For Technology, the divergence is even wider. S&P 500 Tech stocks that have reported have declined an average of 2.71% on their report days. Non-S&P 500 Tech stocks have averaged a nice gain of 2.16%.
Every sector but Health Care has seen non-S&P 500 stocks do much better than S&P 500 stocks on their report days this earnings season. For whatever reason, investors have the blue-chip blues right now, and it's causing the broad markets a lot of trouble.
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