Editor's note: This story was originally written going into 2023 and has been added to our CNBC Investing Club white paper vault. This is the kind of in-depth reporting on the markets that Club members can expect. The S & P 500 index measures the performance of 500 of the largest publicly traded companies on stock exchanges in the U.S. These companies span 11 different market sectors, representing the various industries powering the U.S. economy. The S & P 500, a key benchmark for U.S. equities more broadly, has an overall market value of $37.28 trillion, according to FactSet. In building out Jim Cramer's Charitable Trust, the portfolio we use for the CNBC Investing Club , Jim and his analysts have strived for diversification across sectors and industries. They tend to focus on the stocks of profitable and industry-leading companies that are run by management teams with a history of returning cash to shareholders. Here's a breakdown of each sector by its weighting in the market, the industries that comprise them and the Club companies in each. (All of the S & P 500 and sector data was compiled from FactSet as of the market close on Sept. 12). 1 | INFORMATION TECHNOLOGY SECTOR MARKET WEIGHT : 27.53% MARKET CAP: $10.26 trillion YTD PERFORMANCE: Up 39.8% INDUSTRIES: Communications equipment; electronic equipment, instruments & components; IT services; semiconductors & semiconductor equipment; software; technology hardware, storage & peripherals. Club stocks in the Information Technology sector Apple (AAPL) : The iPhone maker, which briefly reached a historic $3 trillion market capitalization earlier this year, is on track to deliver $100 billion in annual services revenue for its fiscal year 2024 — "a jawdropping trajectory," according to Wedbush Securities, given it delivered roughly $50 billion in fiscal year 2020. Apple is one of just two companies in the Club portfolio whose stock is earmarked as "own it, don't trade it" by Jim, and its fiscal third-quarter results last month gave us great confidence in reaffirming that view. The stock has advanced roughly 35% year to date. Microsoft (MSFT) : The software company has become a key leader in artificial intelligence, boosted by its investment in research laboratory OpenAI , the creator of ChatGPT. The tech giant is also increasingly "leveraging AI offerings" at its Azure cloud computing unit, UBS said in July. The company's focus on incorporating AI into its offerings is one of the key pillars of our investment thesis. Microsoft delivered strong fiscal fourth-quarter results last month, even if its revenue guidance was softer than expected. We still expect the stock to move even higher this year. The stock has gained roughly 40% year to date. Salesforce (CRM) : The enterprise software giant is a global leader in customer relationship-management technology. Over the past year, the company has changed its stripes following pressure from several activist investors, focusing more on expanding margins and managing share dilution — all while continuing to grow its top line at a steady clip. Salesforce has been able to navigate a difficult environment thanks to the leadership of re-energized co-founder and CEO Marc Benioff, with Deutsche Bank in May calling him "one of the rare leaders in software to take a company from inception to $30 billion+ in scale." When Salesforce last reported quarterly results in August, it again proved it's a transformed company balancing profitable growth at scale. The stock has risen more than 65% year to date. Nvidia (NVDA) : The artificial intelligence chipmaker is the Club's other "own, don't trade" stock. The company is a leader in high-performance computing and AI. Nvidia stock has climbed more than 200% year to date on the back of its AI prowess. As UBS put it recently, Nvidia is the "kingmaker" in AI. Following the semiconductor firm's brilliant quarterly results and astounding guidance last month, we raised our price target on its stock to $600 a share, up from $450. Broadcom (AVGO) : We initiated a position in this semiconductor giant in late August, noting that it should be one of the biggest beneficiaries of investments in AI. Two key factors for our investment are Broadcom's AI network solution , Jericho3-AI , and its planned acquisition of enterprise software firm VMware (VMW) , which has a big partnership with Nvidia. Broadcom is unique among semiconductor companies for its growing dividend payment and hefty share buybacks. The stock has gained more than 50% year to date. Palo Alto Networks (PANW) : This cybersecurity firm is "the best brand in the security market with the most relevant products to sell," Wolfe Research said in August. We couldn't agree more, with Palo Alto benefiting from enterprises consolidating their cybersecurity budgets around the best players. The firm is expected to benefit from enterprise spending on cybersecurity over time, a key priority for companies' IT budgets. Following Palo Alto's strong quarterly results in August, we think shares are destined to go higher in the next six to nine months — and, therefore, increased our price target on the stock to $280 a share, from $245. The stock has risen 75% year to date. Oracle (ORCL): The enterprise cloud software firm is "in the early innings of its next chapter in accelerating revenue growth and expanding margins," analysts at Mizuho said in August. We initiated a position in mid-August because Oracle has quietly become one of the top players in cloud infrastructure, joining the likes of Amazon Web Services, Google Cloud and Microsoft's Azure. Oracle's latest quarterly results were mixed, sending shares lower, even as it showed robust growth in cloud services. We see Oracle as one of the cheaper AI beneficiaries in the market and plan to continue to build out our position. The stock has still advanced roughly 35% year to date. 2 | HEALTH CARE SECTOR MARKET WEIGHT: 13.24% MARKET CAP : $4.94 trillion YTD PERFORMANCE: Down 1.5% INDUSTRIES: Biotechnology; health-care equipment & supplies; health-care providers & services; health-care technology; life sciences tools & services; pharmaceuticals. Club stocks in the Health Care sector Humana (HUM) : The company is one of the best health insurers to own for its exposure to the government's Medicare Advantage program, an area in which Humana is taking share from its competitors. Last month, the company's second-quarter results topped expectations, while management offered reassuring commentary on the worrisome medical-cost trends that torpedoed its stock price in mid-June . Humana expects to grow earnings next year within its historical long term target range of 11% to 15%, and toward its $37-per-share target in 2025. The stock has dropped almost 8% year to date. Eli Lilly (LLY) : The pharmaceuticals firm's future earnings growth should be supported by "launches of its first in class/best in class compounds," according to Cantor Fitzgerald. Those include the already-approved diabetes drug Mounjaro, which is expected to soon be approved as a weight-loss treatment in the U.S. Jim has long said Mounjaro could be the best-selling drug of all time. The promise of Mounjaro to combat adverse cardiovascular events and other conditions took the stock to an all-time high and added more than $60 billion of market value when Eli Lilly reported quarterly results last month. The stock has soared more than 60% year to date. Bausch Health (BHC) : This Canadian specialty pharmaceuticals company remains in the Club's penalty box, largely due to the legal overhang of patent litigation. Following the company's quarterly results last month, we reiterated a 4 rating on the stock, advising investors not to act until there's more information. BHC shares are a shadow of their former selves, though they have bounced around 35% year to date. Danaher (DHR) : The life sciences company has "a market-leading franchise in bioprocessing," which remains a core growth segment, according to Leerink Partners. At the same time, bioprocessing — the process of creating products through the use of a living thing like a cell or a virus — has been challenged by a post-pandemic hangover and Danaher is no exception. We view this as a transitional year for the company as it works through excess inventory from the Covid pandemic, while also looking ahead to the separation of the firm's environmental-and applied-solutions division in the fourth quarter. Danaher shares have fallen 5% year to date. GE Healthcare Technologies (GEHC) : The medical technology giant, which was officially separated from General Electric (GE) at the start of the year, is well positioned to see its top line grow as healthcare providers continue to invest in critical equipment. We also believe the rollout of Alzheimer's treatments will be a major demand tailwind. The company's second quarter earnings beat and guidance raise in late July were underappreciated by the market, creating buying opportunities . GEHC shares have gained 12% year to date. 3 | FINANCIALS SECTOR MARKET WEIGHT: 12.71% MARKET CAP: $4.74 trillion YTD PERFORMANCE: Up 2.5% INDUSTRIES: Banks; capital markets; consumer finance; diversified financial services; insurance; mortgage REITs; thrifts & mortgage finance. Club stocks in the Financials sector Morgan Stanley (MS) : The bank's services include investment banking, wealth management and investment management. Morgan Stanley's acquisitions of E-trade Eaton Vance helped expand its horizons beyond traditional investment banking, making it a wealth-and-investment management firm that benefits from recurring fees. The firm maintains solid fundamentals and an affordable valuation , along with a roughly 3.8% annual dividend yield. The stock has gained 2% year to date. Wells Fargo (WFC) : This well-capitalized lender mainly focuses on retail and commercial banking, but has also grown its investment management business in recent years. Bank of America research analysts have a favorable outlook on Wells Fargo for its market-share gains in lending, while noting the firm is "turning around its wealth management business and growing investment banking revenues." We have been impressed by Wells Fargo's turnaround as management reduces expenses and improves compliance. The bank's second-quarter results highlighted its strong underlying fundamentals and capital position. The stock has advanced about 2.5% year to date. 4 | CONSUMER DISCRETIONARY SECTOR MARKET WEIGHT: 10.8% MARKET CAP: $4.03 trillion YTD PERFORMANCE: Up 35.8% INDUSTRIES: Auto components; automobiles; distributors; diversified consumer services; hotels, restaurants & leisure; household durables; internet & direct marketing retail; leisure products; multiline retail; specialty retail; textiles, apparel & luxury goods. Club stocks in the Consumer Discretionary sector Amazon (AMZN) : The e-commerce giant's "high margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest," according to Morgan Stanley. Shares of AMZN have seen a great run so far in 2023 as the company managed expenses by exiting unprofitable businesses, grew into its excess warehouse capacity, regionalized its fulfillment networks, and initiated a series of layoffs in an effort to improve margins. However, growth in its high-margin cloud computing business has slowed, though has of late shown signs of stabilization. Still, we expect generative AI will be a catalyst that reinvigorates its cloud business . The stock has gained more than 70% year to date. Ford (F) : The automaker in late July reported quarterly beats on the top and bottom lines — even as electric-vehicle losses were a bigger drag on the bottom line than expected. We reiterated our 1 rating — meaning we would be buyers at current levels — and $16-per-share price target. But high-stakes negotiations between the United Auto Workers and Detroit automakers could lead to a strike, putting added pressure on already beaten-down Ford shares. The stock has still advanced 10% year to date. Starbucks (SBUX) : The coffee maker is in the early innings of a multiyear reinvention plan that is expected to accelerate the company's growth and expand margins. One key piece of this strategy is to open a new Starbucks location every nine hours in China, on average, in an effort to reach its goal of operating 9,000 stores in the country by 2025. When Starbucks reported quarterly results last month, it demonstrated strong comparable sales internationally and a rebound in China, despite the confusing economic signals in that key market. That gave us more conviction on the company's long-term growth prospects, allowing us to add to our SBUX position in August. The stock has dropped more than 2% year to date. TJX Companies (TJX) : TJX is a leading off price retailer behind the T.J. Maxx, Marshalls and HomeGoods chains. With inflation still high, TJX has been one of the preferred shopping destinations for cost-conscious shoppers looking for great deals on quality brands. The company delivered stronger than-expected fiscal year 2024 second quarter results in August. We see TJX as a winner for the long-term, regardless of the economic climate. TJX has gained more than 16% year to date. Wynn Resorts (WYNN) : The casino operator is another China play for the Club, given Wynn's major presence in gambling hub Macao. Jim recently said the casino operator is firing on "all cylinders," after it reported a strong fiscal second quarter — including higher profit margins out of a resurgent China —across its properties across the globe. Wynn shares have added roughly 15.5% year to date. Foot Locker (FL ): The sports-apparel retailer reported dismal quarterly results late last month, prompting a major change in the way we look at the stock. The company also announced a pause in dividend payments. As such, we downgraded the stock to our 4 rating and removed our price target. We've been in the stock for a turnaround spearheaded by CEO Mary Dillon, but macroeconomic pressures have significantly derailed that story. The stock has declined more than 50% year to date. 5 | COMMUNICATION SERVICES SECTOR MARKET WEIGHT: 8.85% MARKET CAP: $3.3 trillion YTD PERFORMANCE: Up 44.5% INDUSTRIES: Diversified telecommunication services; entertainment; interactive media & services; media; wireless telecommunication services. Club stocks in the Communication Services sector Walt Disney (DIS) : The entertainment giant reported another mixed quarter last month, even against low expectations. While there were enough pockets of optimism in the company's restructuring plan and streaming strategy to believe CEO Bob Iger's turnaround is working, the stock is down more than 7% year-to-date. The company has also faced a host of recent headwinds , including the Hollywood strike, streaming losses and a carriage war with cable TV giant Charter Communications (CHTR) . Disney stock has dropped roughly 3.5% year to date. Alphabet (GOOGL) : The Google parent is a key player in the AI gold rush and "remains well positioned to be a key beneficiary of new AI-powered advertising tools," according to JMP Securities. We expect shares to edge higher over time thanks to management finally getting cost growth below revenue growth, as demonstrated in the tech giant's strong quarterly results in late July. The stock has gained more than 50% year to date. Meta Platforms (META) : The stock of the Facebook and Instagram parent has soared nearly 150% year to date on the back of cost cuts and advancements in AI. Coupled with accelerating revenue growth, the stock is now more deserving of a so-called growth stock multiple instead of the "value" label investors had attached to the firm last year. With earnings estimates moving higher following strong quarterly results in July, we raised our price target to $350 a share, up from $250. 6 | INDUSTRIALS SECTOR MARKET WEIGHT: 8.27% MARKET CAP: $3.08 trillion YTD PERFORMANCE: Up 8.1% INDUSTRIES: Aerospace & defense; air freight & logistics; airlines; building products; commercial services & supplies; construction & engineering; electrical equipment; industrial conglomerates; machinery; marine; professional services; road & rail; trading companies & distributors; transportation infrastructure. Club stocks in the Industrials sector Emerson Electric (EMR) : The U.S. firm's strong quarterly results last month demonstrated how management's efforts to re-orient Emerson's portfolio around automation have helped uniquely position the company for continued growth. The moves also set up Emerson to help its customers with their own energy transition initiatives in the areas such as liquified natural gas (LNG), nuclear, hydrogen, clean fuels, carbon capture, and renewables. The stock has increased about 2.5% year to date. Caterpillar (CAT) : The construction-and manufacturing equipment company is "among the highest quality ideas in machinery," according to D.A. Davidson. We initiated a position in Caterpillar in anticipation of the growth it should see from a raft of U.S. government spending on infrastructure. Caterpillar last month delivered strong quarterly sales , while increasing its backlog to $30.7 billion. The stock has gained 16% year to date. Honeywell (HON) : We own this industrial in large part for the strength in its aerospace division. Though the conglomerate reported disappointing second-quarter earnings and forward guidance in July, it demonstrated strong segment margin expansion. And the company is clearly on a path toward better financial performance resulting from a management team that knows how to execute. We expect new CEO Vimal Kapur to undertake a portfolio review in an effort to accelerate growth. Honeywell shares have dropped roughly 10% year to date. Stanley Black & Decker (SWK) : A clear turnaround at this leading manufacturer of industrial tools and household hardware is in full force and has us bullish about the firm's potential earnings power in a more normalized environment. The increasingly likely return to profitability in the second half of this year should support the stock's rally. As a result, we raised our price target last month to $110 a share, up from $100. The stock has risen more than 15% year to date. 7 | CONSUMER STAPLES SECTOR MARKET WEIGHT: 6.55% MARKET CAP: $2.44 trillion YTD PERFORMANCE: Down 1.5% INDUSTRIES : Beverages; food & staples retailing; food products; household products; personal products; tobacco. Club stocks in the Consumer Staples sector Costco Wholesale (COST) : The membership only wholesale retailer is a volume-based company that sells quality merchandise at lower prices. It's an unmatched value proposition that has been able to withstand whatever twists and turns in the macroeconomic environment. This approach will continue to drive market-share gains and deliver dependable earnings streams for the foreseeable future. The possibilities of a membership fee increase and special dividend sometime in the future also keep us long-term owners of the stock, which has gained more than 20% year to date. Estee Lauder (EL) : Our position in this prestige beauty company has been predicated on the economic recovery in China, which accounts for about a third of Estee Lauder's total sales. But the company's performance has been weighed down by a slower-than-expected recovery, particularly in Asia travel retail. We are sticking with the stock for now — on the belief that growth can begin to reaccelerate after the next few quarters, with a more material margin rebound in the back half of the year. The stock has dropped more than 35% year to date. Procter & Gamble (PG) : The consumer goods company — whose household-name brands include Tide, Crest and Gillette — is a defensive play for the Club. With its most recent quarterly results , in late July, P & G again demonstrated its ability to raise prices on its many household staples without damaging sales volume, a key reason to own the stock in an uncertain economic environment. At the time, we reiterated our 2 rating on the stock — meaning we'd buy shares on a pullback — as well as our price target of $168 a share. The stock has gained 1% year to date. Constellation Brands (STZ) : The alcoholic beverage maker — known for beer brands like Corona, Modelo and Pacifico — is the third-largest beer company in the U.S. and is the No. 1 high-end beer supplier and market-share gainer in the U.S. We raised our price target on the stock to $270 a share, up from $260, after the company reported quarterly results in June. Meanwhile, we remain encouraged by Constellation's willingness to work with activist investor Elliott Management . The stock has gained 12% year to date. 8 | ENERGY SECTOR MARKET WEIGHT: 4.67% MARKET CAP: $1.74 trillion YTD PERFORMANCE: Up 8% INDUSTRIES: Energy equipment & services; oil, gas & consumable fuels. Club stocks in the Energy sector Coterra Energy (CTRA ): One of our foundational investing principles is to invest in profitable companies that return cash to shareholders and have reasonable valuations — and oil-and-natural-gas producer Coterra checks all those boxes. We own the name for its strong cash-flow generation, allowing the firm to prioritize stock buybacks for shareholders. Still, Coterra last month missed on expectations for its second quarter results and forward guidance. The stock has gained roughly 15% year to date, with a lot of that advance c oming since oil's summer low . Pioneer Natural Resources (PXD): The company is the best-run independent oil producer with some of the lowest break-even costs, making it well-positioned to benefit from any future increases in oil prices this year. In August, Pioneer — which operates high quality assets in the Permian Basin — delivered a hearty earnings beat, demonstrating its money-making ability during a quarter in which oil prices largely trended downward. Since then oil prices have been climbing, with West Texas Intermediate crude now above $89 a barrel. The stock has gained roughly 2.5% year to date. 9 | UTILITIES SECTOR MARKET WEIGHT : 2.47% MARKET CAP: $922 billion YTD PERFORMANCE: Down 8.5% INDUSTRIES: Electric utilities; gas utilities; independent power and renewable electricity producers; multi-utilities; water utilities. While we currently don't own any utilities in the portfolio, investors typically own companies in the sector for their defensive characteristics and resilience in economic downturns. Utility stocks tend to perform better when there are concerns over slowing economic growth. Companies in this sector offer basic services such as electric power, natural gas, water supply or sewage removal. One utility name in the Club's bullpen is Sempra Energy (SRE) , which owns utilities in California and Texas in addition to infrastructure assets like natural gas pipelines and liquefied natural gas (LNG) export assets. 10 | MATERIALS SECTOR MARKET WEIGHT: 2.45% MARKET CAP: $915 billion YTD PERFORMANCE: Up 6.5% INDUSTRIES: Chemicals; construction materials; containers & packaging; metals & mining; paper & forest products. Club stocks in the Materials sector Linde (LIN) : The largest industrial gas company in the world, Linde consistently operates at a high level, no matter the ups and downs in the global economy. The company continues to find a way to optimize costs through productivity initiatives and grow its earnings at a double-digit clip. We expect earnings growth to accelerate further give the company's role in the clean energy transition. After Linde reported solid second-quarter results in late July, we raised our price target on the company's stock to $410 a share, up from $390. The stock has gained 18% year to date. DuPont (DD) : We initiated a position in this specialty chemicals maker in early August. The industrial company has become an interesting way to play the recovery in the semiconductor and electronics industries without paying a typically higher chip-stock multiple. Its electronics and industrial business makes differentiated materials and component solutions for high-performance computing, 5G, electronic vehicles, and consumer electronics like smartphones and PCs. The stock has advanced 8% year to date. 11 | REAL ESTATE SECTOR MARKET WEIGHT: 2.44% MARKET CAP: $909 billion YTD PERFORMANCE: Up 0.9% INDUSTRIES: Equity real estate investment trusts; real estate management & development. While we don't own any real estate stocks, investors have historically invested in the sector for its reliable cash flow from income-generating properties. Beyond physical real-estate properties, investors can also purchase real estate investment trusts, or REITs, on the open market.
