U.S. industrial stocks are vulnerable to the kind of weakness they displayed at this time last year, according to Gina Martin Adams, a Wells Fargo & Co. strategist.
The CHART OF THE DAY shows how the performance of the Standard & Poor’s 500 Industrials Index this year compares with the same period of 2012. Last year, the indicator peaked in March and took almost nine months to surpass that high.
The group’s swings by comparison with the S&P 500 are following “an eerily similar pattern,” Martin Adams wrote in a report yesterday. She added that a relative performance index fell below its 50-day moving average, a gauge of market trends, at about the same time as it did in 2012.
In March, the S&P industrials index retreated after coming within 4.5 percent of its peak. The earlier high was reached on Oct. 9, 2007, the same day that the S&P 500 Index climbed to a record -- one that was broken on March 28.
“Industrials top our list” of industries most at risk for declines, the New York-based strategist wrote. Commodity producers and financial stocks may head lower as well, she added.
Martin Adams reiterated her forecast that the S&P 500 will finish the year at 1,390, or 11 percent lower than yesterday’s close. The estimate is the lowest among 17 strategists in a Bloomberg survey.