U.S. stock-market investors are about to witness something that’s hasn’t been seen in decades: the creation of a new market sector. Friday will see the launch of the S&P Communications Services sector, a reshuffling of major industry groups that will impact some of the most widely followed and traded names on Wall Street. The new sector will include companies that are currently in three different industry groups: telecommunications, including Dow components AT&T Inc. T, -0.03% and Verizon Communications VZ, +0.11% ; technology, with Facebook Inc. FB, +0.05% and Google-parent Alphabet Inc. GOOGL, +0.63% GOOG, +0.62% among the most high-profile names moving; and consumer discretionary, where Walt Disney Co. DIS, +0.25% and Netflix Inc. NFLX, +0.09% are among the stocks making the shift. The new sector includes both companies that facilitate communication operations, as well as ones that offer the content and information that is spread through various media. The move was seen as a way to address how the primary business of different companies often span multiple sector categories and don’t always reflect the industry they’re currently classified in. “Ultimately, the new communication service sector will better reflect the rapidly changing way the world’s population communicates,” wrote Lindsey Bell, an investment strategist at CFRA. However, she noted that the change “will result in a more cyclical, lower yielding sector,” in contrast to the defensive posture of the current telecom group. While the real-estate sector was introduced in 2016 with the components spun out of the financial sector, this marks the first time that a new industry group will be created in this fashion. Morgan Stanley called the realignment “unprecedented” in market history. The change will take effect after the close of trading on Friday, though it was announced months ago, and many exchange-traded funds and other sector-based strategies have already adjusted their holdings to track the new index. While the change may not show up in the movements of major indexes, it will substantially change the market’s makeup. The new sector will account for nearly 10% of the S&P 500’s SPX, -0.35% market capitalization, according to data from CFRA. The weighting of the technology sector will drop from about 26% of the overall market to 21%, though it will remain the single biggest influence. The discretionary sector will drop to 10% from roughly 13%. Read further here.... https://www.marketwatch.com/story/a...-heres-what-investors-need-to-know-2018-09-24
Well, it's not actually a new sector - it is an expanded sector. As usual screwups go, S&P have royally screwed this up for the next week. The amended indexes/relocated subindexes/new subindexes have been created yet they don't actually change the classifications of the underlying stocks until a week later. Takes a special kind of idiot to think up this madness.