Over the past decade the S&P 500 has seen a total return of 252.2% (12/31/09 through 12/17/19), which translates to a compound annual total return rate of 13.5%. Over that time two new sectors were added to the index. The real estate sector was separated from the financials sector and the communication services sector was created by removing the telecommunications services sector and pulling constituents from the information technology and consumer discretionary sectors. The information technology sector posted the greatest compound annual total return of 17.3%. Within the sector, the software & services (17.8%) and semiconductors & semiconductor equipment (17.3%)

Semiconductors tend to be a leading indicator for technology as they effectively supply the components that allow for many modern day innovations. The semiconductors and semiconductor equipment industry has had a strong 2016, which is likely an indication that growth will flow through to other industries. However, given the industry’s massive growth along with its historical cyclicality, investors are closely monitoring sentiment along with earnings to determine if the cycle has peaked. Let’s review some of Thomson Reuters’ predictive analytic models using Micron Technologies Inc. (MU.O) as an example to show how sentiment can enhance the ability to navigate this