What Boosted the Industrial Sector in September 2017?
The industrial sector also played an important role in the S&P 500 Index in September 2017. The Industrial Select Sector SPDR Fund (XLI), which tracks the performance of the industrial sector, rose 3.4% so far in September 2017. On a year-to-date basis, the ETF returned 13.1% as of September 28, 2017.
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The expectation for higher fiscal stimulus and infrastructure development has mainly driven the performance of the industrial sector so far this year. The earnings growth of the industrial sector needs to improve further in the second half of 2017 to support the higher market price of this sector.
Billionaire investor Mario Gabelli is a strong player in the infrastructure space. He has made sizable investments in Mueller Industries (MLI), United Rentals (URI), and HERC Holdings (HRI). In early September 2017, various industrial stocks and the industrial sector ETF rose sharply on the expectation of investments in the defense sector.
Major holdings of the industrial sector
Major XLI holdings General Electric (GE), Boeing (BA), 3M Company (MMM), and Honeywell International (HON) returned nearly -23.5%, 62.3%, 17.7%, and 21%, respectively, on a year-to-date basis, as of September 28, 2017.
In the next part of this series, we’ll analyze the performance of the energy sector.