Energy has been the hot topic in regard to investments. The drop in the price of oil (USD 37 per barrel) and prolonged low values of many commodities (S&P GSCI, -33% YTD) has added concern to an already nervous bond market. The expectation that the U.S. Federal Reserve would follow through on its assumed intention to start raising rates after its Dec. 15–16, 2015, round of meetings already had market participants on edge. Current events in the bond and commodity markets have added a heightened sense of unease.
In this market environment, interest in energy has taken on a life of its own. The Materials sector can also be included in the concern group as the sector is highly related to commodities such as chemicals, metal & mining and construction materials. As a point of information and comparison, Exhibit 1 gives insights into a few of our key indices.
Exhibit-1: Index Industry Weights