S P 500 Financials Sector.pptVIP

S P 500 Financials Sector S P 500 Financials Sector S P 500 Financials Sector 7/21/2009 Jerod Tilton Jon Verworn Zachary Wang Agenda Sector Weighting Condition of Sector (5 Forces) Economic Drivers Performance Relevant Facts Recommendation Questions 7/21/2009 * S P 500 Financials Sector Historical Sector Weighting Information Technology: Largest 18.4% Materials: Smallest 3.2% Financials: 13.7% Financial Sector Weighting Trending Upwards 7/21/2009 * S P 500 Financials Sector Sector Weighting Financial Sector Underweight Relative to SP 500 by 4.4% 4.0% excl cash 7/21/2009 * S P 500 Financials Sector Industry Breakout Industries showing declining growth 7/21/2009 * S P 500 Financials Sector Top Stocks SIM Class has 5 Financial Stocks 3 of five in top four regarding capitalization Capitalization has decreased significantly since 2007 7/21/2009 * S P 500 Financials Sector Porters Five Forces Barriers to Entry Little to none Competition High Substitution Little, but can be a pain Supplier Power High, the Fed has a lot of control Buyer Power Can go to a number of banks 7/21/2009 * S P 500 Financials Sector Economic Drivers 7/21/2009 S P 500 Financials Sector * Direct Crude Oil Consumer Confidence Inverse Unemployment Direct Fed Funds rate Economic Drivers Cont’d Direct Home Price Mortgage Applications Directional Direct Housing Starts 7/21/2009 S P 500 Financials Sector * Performance relative to the SP 500 Relative to the market (SP 500), the financial sector has performed relatively well on average within the past decade. However, due to the banking crisis and the recession, performance dropped significantly within the last two years. In 2008, the financial sector’s performance fell to -30% when compared to the market. Currently, the sector has rebound a little to -27% Financial Sector in Relation to SP 500 10 Yr Financial Sector in Relation to SP 500 2 Yr 7/21/2009 * S P 500 Financials Sector Performance relative to other sectors SP 500 Operating Earni