Sector Views: Monthly Stock Sector Outlook

Schwab Sector Views is our six- to 12-month outlook for stock sectors, which represent broad sectors of the economy. The Schwab Center for Financial Research (SCFR) combines a factor-based approach with a market and economic assessment to determine the ratings. For the basics on sectors, please see Stock Sectors: What Are They? How Are They Used?

Sector views

Energy, Financials and Materials remain Outperform. Meanwhile, Information Technology is in last place based on factors, but we maintained our override and continue to rate it Marketperform. We believe its growth prospects are good and that the dominance of a few mega-cap stocks skews its factor-based position. Real Estate remains Underperform based on weak fundamentals, including high interest rates and still-rising vacancy rates. Communication Services slipped to ninth place, but as with Technology the dominance of a few stocks tends to skew its factor rankings.

Sector ratings

Sector ratings

Source: Schwab Center for Financial Research, as of 4/15/2024.

The ratings Outperform, Marketperform, and Underperform reflect SCFR's opinions about the likelihood that the sector will perform better (outperform), about the same (marketperform), or worse (underperform) than the broader S&P 500®index during the next six to 12 months. Asterisks (*) mean that SCFR overrode the factor model in determining the rating. Sectors are based on the Global Industry Classification Standard (GICS®), an industry analysis framework developed by MSCI and S&P Dow Jones Indices to provide investors with consistent industry definitions. Sectors are listed in the above chart in order of their performance in five factors that are shown in the chart below. The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Investing involves risk, including loss of principal.