Of all the US sectors, Consumer Discretion has had the most stable and strong performance throughout this year. We have had it over-weighted for some time, and it continues to be at this place today. The economic rebound up to this point has been very dependent on the consumer, but we believe that the next few months is going to see housing and municipalities start to help with the heavy lifting.
Some of the other US sector highlights this week include:
- Healthcare has recently been a little softer - possibly all the election talking about Obamacare.
- Utilities and Consumer Staples, the big defensive sectors, have been weaker recently.
- Energy is showing some bottoming action; however, this sector has been so weak, that the recent bounce is not nearly as impressive...yet.
- Large-cap Financials had been very strong, but this week, they seem to be ready for a rest.
You can see these trends and more in the relative strength charts of the market weight (blue line) and equal weight (orange line) S&P 500 sectors below.
Click on the image above to view larger charts.
Don Hays, Nicholas Warf & Justin Wood
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