The charts below show the relative strength of the ten S&P 500 sectors as well as the Dow Jones Transports and the Russell 2000 relative to the S&P 500 over the last year. When the line is rising it indicates that the sector is outperforming the S&P 500, while a falling line indicates underperformance. We have also shaded each sector in red or green to indicate whether the sector has outperformed (green) or underperformed (red) the S&P 500 over the last year.
Of the ten S&P 500 sectors, just four have outperformed the S&P 500 over the last year. Of these four sectors, Financials have outperformed the S&P 500 by the widest margin, beating out Consumer Discretionary which has been one of the market's leaders throughout the entire bull market. Sectors that have underperformed the S&P 500 by the widest margin include Energy and Utilities. Industrials and Materials have also underperformed over the last year, but both sectors have seen significant improvement and are gradually working their way back to positive territory.
In addition to the ten S&P 500 sectors, we also show the relative strength of the Dow Jones Transports and the Russell 2000 versus the S&P 500. Many investors and traders look to these indices as potential leading indicators for the overall market. While it is debatable as to how accurate these two indices are in leading the overall market, the recent strength of both of these indices versus the broader market is an encouraging sign for bulls.