| Communication Services, which has only been a separate category for a year now, was the final member to outperform the S&P 500 with a return of 19.7% This sector includes diversified telecommunication services, wireless telecommunication services, media, entertainment, and interactive media & services. Components include Facebook (NSDQ: FB), Alphabet (NSDQ: GOOGL), and AT&T (NYSE: T). Financials gained 17.1% during the quarter, but this sector was the top-performing sector in the second quarter. In addition to banks, this group includes financial services firms, insurance companies, and consumer finance companies. Major companies include Berkshire Hathaway (NYSE: BRK.A, BRK.B), JPMorgan (NYSE: JPM), and Citigroup (NYSE: C). 
The Materials sector rose 17.0% in the first half. This sector includes companies that produce chemicals, construction materials, metals and mining, and paper and forest products. Among its largest components are DowDuPont (NYSE: DWDP) and Sherwin-Williams (NYSE: SHW). The Consumer Staples sector turned in a first half return of 15.9%. Making up this sector are companies involved in the development and production of consumer products that cover food and drug retailing, beverages, food products, tobacco, household products, and personal products. Component stocks include Proctor & Gamble (NYSE: PG), Philip Morris International (NYSE: PM), and Coca-Cola (NYSE: KO). The Utilities sector was one of the laggards of the first half, with a 14.4% return. It also lagged the S&P 500 during the second quarter. However, the utilities sector is the top-performing sector over the past year, with a total return of 18.6%. Companies that produce, generate, transmit or distribute electricity or natural gas predominantly make up the Utilities sector. Component companies include NextEra Energy (NYSE: NEE), Duke Energy (NYSE: DUK), and Dominion (NYSE: D). 
The Energy sector was another laggard during the first half, with a total return of 13.0% (and a strong Q1). However, the energy sector has seen two abysmal quarters over the past year on the back of volatile oil and gas prices. Energy is the only sector of the S&P 500 with a negative return over the past year. Some of the energy sector's biggest holdings are ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), ConocoPhillips (NYSE: COP), EOG Resources (NYSE: EOG), and Schlumberger (NYSE: SLB). The Health Care sector was in last place for the first half with a 7.9% gain. Health Care has been a top-performing sector for years, and is up 12.8% over the past year, which is fifth best among all sectors. This sector includes health care equipment and supplies, health care providers and services, biotechnology, and pharmaceuticals industries. Bellwethers in the health care sector include Johnson & Johnson (NYSE: JNJ) and Pfizer (NYSE: PFE). Playing The Late-Cycle Stage If you attempt to time your investments according to the business cycle, the economy is presently in the late-cycle stage, where economic growth rates start to slow as credit tightens. Recession typically follows the late-cycle phase, and some recession indicators have been flashing. The consistent overperformers during the late-cycle are defensive and inflation-resistant sectors: the energy sector, the health care sector, and the materials sector. None of these sectors outperformed the S&P 500 during the first half, although the materials sector outperformed the S&P 500 in the second quarter. In my report card following the first quarter I noted that "the material sector may be becoming a relatively better value." This time, I will note that energy seems to be becoming a relatively better value given its recent underperformance and the present business cycle stage. Health care would be a close runner up. The utilities and the consumer staples sectors generally outperform during the late business cycle, but they are also consistent outperformers during the recession phase that often follows. Of note, both sectors outperformed the S&P 500 over the past year, although both lagged the index in the first half. As I've just explained, investors have enjoyed a stellar first half of 2019. But will the rest of the year prove as profitable?
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