Stock Market Briefing: S&P 500 Sectors STEG, LTEG, & PEG

Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG January 23, 1 Dr. Edward Yardeni 1-92-3 eyardeni@ Joe Abbott 32-49-3 jabbott@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents S&P Sectors LTEG 3 S&P Sectors STEG 4 S&P Sectors PEG Ratio S&P Consumer Discretionary Consumer Staples Energy 9 Financials Health Care 11 Industrials Information Technology 13 Materials 14 Telecom Services Utilities 1 January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

24 22 1 1 14 Figure 1. CONSUMER DISCRETIONARY (S&P LTEG* by sector, percent) (.2) 9 11 13 14 1 1 1 19 S&P Sectors LTEG INDUSTRIALS (.3) 9 11 13 14 1 1 1 19 14 13 11 9 11 9 CONSUMER STAPLES (.9) 9 11 13 14 1 1 1 19 INFORMATION TECHNOLOGY (14.) 9 11 13 14 1 1 1 19 1 1 1 14 13 11 4 ENERGY 3 (4.) - - 9 11 13 14 1 1 1 19 MATERIALS (13.) 9 11 13 14 1 1 1 19 22 1 14 1 14 FINANCIALS (.) 9 11 13 14 1 1 1 19 TELECOMMUNICATION SERVICES (3.) 9 11 13 14 1 1 1 19 4 2 14 13 11 9 HEALTH CARE (.) 9 11 13 14 1 1 1 19 UTILITIES (4.2) 9 11 13 14 1 1 1 19 4 2 * Analysts consensus expected long-term earnings growth rate over the next five years. Page 3 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

4 4 3 3 2 Figure 2. CONSUMER DISCRETIONARY (S&P STEG* by sector, percent) (.4) 9 11 13 14 1 1 1 19 S&P Sectors STEG INDUSTRIALS (13.) 9 11 13 14 1 1 1 19 3 - - 9 CONSUMER STAPLES (9.) INFORMATION TECHNOLOGY (13.1) 3 3 9 11 13 14 1 1 1 19 9 11 13 14 1 1 1 19-4 3 3 24 1 1 - ENERGY (4.2) 9 11 13 14 1 1 1 19 MATERIALS (19.1) 9 11 13 14 1 1 1 19 4 - -4 4 FINANCIALS (2.) TELECOMMUNICATION SERVICES 3 (4.1) - - 9 11 13 14 1 1 1 19 9 11 13 14 1 1 1 19-9 HEALTH CARE UTILITIES (4.) 3 (.) 9 11 13 14 1 1 1 19 9 11 13 14 1 1 1 19 - * Analysts consensus expected short-term earnings growth rate over the next 2 weeks. Page 4 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

3. 2. 2. 1. 1.. Figure 3. CONSUMER DISCRETIONARY (1.4) 9 11 13 14 1 1 1 19 S&P Sectors PEG Ratio INDUSTRIALS (1.) 9 11 13 14 1 1 1 19 2.2 2. 1. 1. 1.2 1... 3. 3. 2. CONSUMER STAPLES INFORMATION TECHNOLOGY 1. 1.4 1.2 2. 1. 1. (2.) (1.3). 1. 9 11 13 14 1 1 1 19 9 11 13 14 1 1 1 19. 3. 3. 2. 2. 1. 1... ENERGY (.) 9 11 13 14 1 1 1 19 MATERIALS (1.4) 911131411119 3. 2. 2. 1. 1.. 2.2 2. 1. 1. 1.2 1... FINANCIALS (.9) Includes Real Estate through September 1 9 11 13 14 1 1 1 19 TELECOMMUNICATION SERVICES (3.) 9 11 13 14 1 1 1 19 4 3 2 1 1. 1. HEALTH CARE UTILITIES (3.9) 9 1.2 1. (1.) 3. 9 11 13 14 1 1 1 19 9 11 13 14 1 1 1 19 1 * Sector s forward P/E divided by sector s consensus projected -year earnings growth rate. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

3 3 Figure 4. S&P LTEG & STEG S&P 3 3 2 LTEG* (14.3) STEG* (14.) 2 - - 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 3 Figure. S&P VALUATION 3 2 Forward P/E* (1.) 2 1. PEG Ratio** (1.3) 1. 1. 1. 1.2 1.2 1. 1.. 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19. Monthly through December, then weekly. ** P/E relative to consensus -year LTEG forecast. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure. Consumer Discretionary S&P CONSUMER DISCRETIONARY LTEG VS STEG STEG capped at % 4 LTEG* (.2) STEG* (.4) 4 3 3 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 3 3 2 Figure. S&P CONSUMER DISCRETIONARY VALUATION Forward P/E* (21.) 3 3 2 3. 3. 2. 2. Relative P/E** (1.2) PEG Ratio*** (1.4) 2. 2. 1. 1. 1.. 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1.. ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure. S&P CONSUMER STAPLES LTEG VS STEG Consumer Staples LTEG* (.9) STEG* (9.) 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 3 2 Figure 9. S&P CONSUMER STAPLES VALUATION 3 2 Forward P/E* (19.) 3. 3. 2. Relative P/E** (1.1) PEG Ratio*** (2.) 2. 2. 2. 1. 1. 1. 1.. 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19. ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure. S&P ENERGY LTEG VS STEG Energy LTEG* (4.) STEG* (4.2) STEG capped at % 2 2-2 -2-199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. Figure 11. S&P ENERGY VALUATION 4 3 Forward P/E* (24.) 4 3 3. 3. 2. Relative P/E** (1.3) PEG Ratio*** (.) Relative P/E capped at 3. PEG capped at 3. 3. 3. 2. 2. 2. 1. 1... 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1. 1... ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page 9 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure. S&P FINANCIALS LTEG VS STEG Financials STEG capped at % 4 4 4 3 3 LTEG* (.) STEG* (2.) 4 3 3 2 - - 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 2 - - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. Figure 13. S&P FINANCIALS VALUATION Forward P/E* (14.2) 2. Relative P/E** (.) 2. 2. PEG Ratio*** (.9) 2. 1. 1. 1.. 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1.. ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure 14. S&P HEALTH CARE LTEG VS STEG Health Care LTEG* (.) STEG* (.) 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 3 3 Figure. S&P HEALTH CARE VALUATION 3 3 2 2 Forward P/E* (1.2) 2. 2. 1. 1. 1. 1. 1.2 1.2 1... Relative P/E** (.9) PEG Ratio*** (1.) 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1... ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page 11 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

2 Figure 1. S&P INDUSTRIALS LTEG VS STEG Industrials 2 LTEG* (.3) STEG* (13.) - - - - - - 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 2 Figure 1. S&P INDUSTRIALS VALUATION 2 Forward P/E* (19.) 2.2 2. 1. 1. Relative P/E** (1.1) PEG Ratio*** (1.) 2.2 2. 1. 1. 1.2 1... 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1.2 1... ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

4 Figure 1. S&P INFORMATION TECHNOLOGY LTEG VS STEG LTEG* (14.) STEG* (13.1) Information Technology 4 3 3-199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 4 3 Figure 19. S&P INFORMATION TECHNOLOGY VALUATION Forward P/E* (19.) 4 3 3. 2. 2. Relative P/E** (1.1) PEG Ratio*** (1.3) 3. 2. 2. 1. 1. 1.. 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1.. ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page 13 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure. S&P MATERIALS LTEG VS STEG Materials STEG capped at % 4 4 3 3 - - - -3-4 - LTEG* (13.) STEG* (19.1) 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - -3-4 - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 3 Figure 21. S&P MATERIALS VALUATION 3 2 Forward P/E* (1.) 2 3. 2. 2. 1. Relative P/E** (1.) PEG Ratio*** (1.4) 3. 2. 2. 1. 1... 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 1... ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page 14 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

3 2 Figure 22. Telecom Services S&P TELECOMMUNICATIONS SERVICES LTEG VS STEG LTEG* (3.) STEG* (4.1) 3 2 - - - - - - 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. 3 3 2 4 3 2 1 Figure 23. S&P TELECOMMUNICATION SERVICES VALUATION Forward P/E* (.) Relative P/E** (.) PEG Ratio*** (3.) 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 3 3 2 4 3 2 1 ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

Figure 24. S&P UTILITIES LTEG VS STEG Utilities - LTEG* (4.2) STEG* (4.) - - 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 - * STEG: - month (2-week) forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. Monthly data through, then weekly. Figure 2. S&P UTILITIES VALUATION Forward P/E* (1.) 9 4 3 2 1 Relative P/E** (.9) PEG Ratio*** (3.9) 199 199 199 199 1999 1 2 3 4 9 11 13 14 1 1 1 19 9 4 3 2 1 ** Sector or industry forward P/E relative to S&P forward P/E. *** Sector or industry forward P/E relative to sector or industry consensus -year LTEG forecast. Page 1 / January 23, 1 / Stock Market Briefing: S&P Sectors STEG, LTEG, & PEG www.

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