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Growth gains

The latest market insights report from Wilshire, an index provider, peers under the bonnet of the USD equity market. 

That market, as measured by the S&P 500, is down  24 per cent this year. In the third quarter, the US market lost around 4 per cent.

But the most interesting bit of data is that in Q3, growth reversed some of the losses it had incurred year to date, outperforming the value factor, albeit with both strongly in negative territory, growth losing 3 per cent in three months and value losing 5 per cent. 

Only two sectors delivered positive returns during the quarter: consumer discretionary, which returned 4 per cent, and energy, which returned 3.5 per cent. 

The worst performing sector in the quarter was communication services, which lost 12 per cent, while real estate lost 10 per cent.

The new quarter has begun much more positively for US equities, as investors begin to consider the possibility that interest rates may not rise by as much as previously anticipated. 

Earnings season is probably the next major test of market sentiment, and if the market rally can survive that, next quarter’s top performing sectors may look very different.

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