Daily Chemical Reaction
The Safety Dance – US Chemical Equities Underperformed The Overall Market In 1H24; Will 2H24 Be Any Better?
Key Findings
- General Thoughts: The US S&P chemical sector index has notably underperformed the overall S&P 500 Index YTD, with S&P chemical outperformance driven by its relatively more risk-averse areas, industrial gases and agriculture.
- Supply Chain/Commodities: We flag the benefits of the C-MACC/PXi polymer pricing service for the investment community, our 2H24 view of chemical sector performance, and a few recent chemical market developments.
- Energy/Upstream: We highlight crude oil and natural gas movements relative to commodity, specialty, fertilizer and agricultural chemical equity performance, and our preference to stay in cost-advantaged areas.
- Sustainability/Energy Transition: We discuss asset-under-management trends at global sustainable investment funds and note that growth in this area has been most pronounced in Europe relative to the Americas and Asia.
- Downstream/Other Chemicals: We discuss North American chemical rail traffic strength, noting it is the second strongest AAR category YTD, and flag recent currency movements, specifically the US Dollar and Japanese Yen.
Exhibit 1: The S&P 500 Chemicals Index and all its sub-sectors underperformed the overall market in 2Q24.
Source: Bloomberg, C-MACC Analysis, June 2024
See the PDF below for all charts, tables, and diagrams
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