Capital Markets: Observations & Insights

Sector Valuations Vary ​ Valuation

• Energy appears expensive given relatively depressed levels of earnings while health care looks inexpensive due in part to the perceived threat of pricing pressure

P/E Relative to 20-Year Median

27%

19%

14%

13%

6%

6%

1%

-1%

-1%

-2%

-8%

Energy

Utilities

S&P 500

Materials

Financials

Industrials

Health Care

Real Estate

Consumer Staples

Information Technology

Consumer Discretionary

Source: FactSet, based on S&P 500 Index, 6/30/18. Note: telecommunications is excluded given its small number of constituents and pending reclassification. Real estate is a new sector classification, so for the historical data shown above, the industry group category that has nearly 17 years of data was utilized.

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