In the charts below we highlight the relative strength of the ten S&P 500 sectors compared to the S&P 500. For each chart, when the line is rising, it indicates the sector is outperforming the S&P 500 and vice versa when a sector's line is falling.
Over the last two weeks there has been a notable shift in the relative strength characteristics of the ten S&P 500 sectors. Whereas during the month of June we saw defensive sectors outperforming cyclicals, today cyclicals have moved into the leadership role. The relative strength of the Consumer Discretionary sector is now at new highs. Industrials and Materials have both hooked higher, and the Technology sector has broken its recent downtrend.
Defensive sectors, on the other hand, have all recently lagged. As noted in the individual charts, Consumer Staples, Health Care, Telecom Services, and Utilities have all seen their relative strength reverse multi-month uptrends. Finally, financials continue to sink ever further into the abyss of underperformance. What will it take to get this sector out of its rut?
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