Below we have updated our charts of sector relative strength. In each chart, rising lines indicate periods where the sector is outperforming the S&P 500. Charts with red shading indicate that the sector has underperformed over the last year. In each chart we also include red dots that highlight each of the Fed rate cuts and black dots indicating meetings when the Fed left rates unchanged. We also included a chart of the relative strength of the Transportation sector versus the S&P 500. While it has not been considered an 'official' sector since 2001, interest in the group has been high given the wild swings in energy prices.
In terms of strength, the Consumer Staples sector has been far and away the best performer, followed by Health Care. These two sectors are traditionally considered defensive, so it is little surprise that they are outperforming. On the downside, only four of the 'official' ten sectors are underperforming the S&P 500 over the last year. Financials have been the obvious laggard given the credit crisis. What is somewhat surprising, however, is that the Consumer Discretionary sector is actually outperforming the S&P over the last 12 months. With all the troubles facing the consumer, it is encouraging to see that this sector has manged to show some strength...at least on a relative basis.
For those interested, these charts are updated each week for Bespoke Premium subscribers in our Sector Snapshot.
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