Several S&P 500 sectors have quietly shrunk to historically unusual weights, with no recession in sight
Josh Brown flags that healthcare, consumer staples, and energy have all seen dramatic weight collapses inside the index, each for its own distinct reason.
Three S&P 500 sectors have quietly lost enormous ground inside the index, and Josh Brown argues the causes are not the usual ones.
The joke I always use is healthcare took a GLP1. It went from 16% to 8% of the S&P 500. Josh Brown
Healthcare is the starkest case. Brown points to GLP-1 drugs as the culprit behind a halving of the sector’s weight, from 16 percent down to 8 percent. Consumer staples have fared no better, sitting at just 4.5 percent of the index, a level Brown describes as evaporating. Consumer discretionary has slipped below 10 percent, a threshold Brown says has historically appeared only in recessions, which makes the current reading unusual given that no downturn is underway.
Energy tells a different story. Rather than simply shrinking, the sector’s relationship to the broader market has broken down entirely. Brown notes that energy’s beta to the S&P 500 has turned negative, meaning the sector now moves against the index rather than with it. Taken together, these shifts suggest the index’s composition is changing in ways that do not map neatly onto standard economic narratives.