S&P 500 Sector Relative Strength: Consumer Staples In Steep Downtrend

Hickey and Walters (Bespoke) submit: With another week in the books, we updated our sector relative strength charts. Rising lines indicate periods where the sector outperformed the S&P 500, while falling lines indicate underperformance. Charts highlighted in red indicate the sector is underperforming the S&P 500 over the last 12 months.

Over the last year, five sectors have outperformed the S&P 500, while five have underperformed. Consumer discretionary stocks look to be trying to mount a comeback just as the consensus says housing has killed the consumer. Meanwhile, the consumer staples sector remains in a steep downtrend. If this recent decline were the start of something more dramatic, history would tell us that this sector would be starting to outperform. In a similar vain, the recent pick up in the industrial sector tells implies that the global economy is strong.

As one might expect, the financial sector really looks like its fallen out of bed in the last couple of weeks as several negative factors all hit at once (hedge fund worries, rising interest rates, Washington rumblings). Likewise, the pick up in interest rates has really taken its toll on utilities. After weeks like this, it is common to see article after article tell us that the rally is over, so let's try not to get too pessimistic. Have a great weekend.

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Comments

[cayman:]

Isn't the consumer the locomotive of the entire thing. Once they pack up then it's just a matter of time before the others in the food chain feel the effects. ????

2007 Jun 25 03:07 AM