This week the “Chart of the Week” looks at the energy sector of the S&P500 and specifically how it fits in in terms of market capitalization weight and share of total earnings across the index. Simply put, energy stocks have fallen to the lowest market cap weighting since late 2003 (and again at the height of the dot com boom). Part of this is down to the disastrous few years the energy sector has been through following the commodity crunch of 2014-16, and part of it is crowding-out from the super heavyweight sectors of Tech, Financials, and Healthcare.
The chart comes from a broader discussion in a report on the outlook for energy stocks and oil price. With a number of short-term and medium-term factors lining up to at least support if not push oil prices higher from here, it raises the question as to whether this chart represents a long-cycle low point for the energy sector.