Sector Relative Strength: Industrials Surprisingly Strong

Hickey and Walters (Bespoke) submit: While it seems like nearly every area of the market has gone down over the last couple of weeks, certain sectors have held up better than others. The best way to monitor this is by looking at the relative strength of each sector vs. the S&P 500.

Below we show the relative strength of each sector over the last year. A rising line means that the sector is outperforming the market, while a falling line indicates that the sector is underperforming. Sectors which have underperformed over the last year are highlighted in red. For reference, the red dot in each chart shows when the S&P 500 reached its intraday high on July 16th.

While one would expect to see outperformance by defensive sectors as the market declines, only Consumer Staples and Telecom Services have shown a meaningful reversal since the peak. Health Care and Utilites on the other hand, have not shown a meaningful shift.

Conversely, one would expect the Industrials sector to falter during a market decline, yet that sector continues to outperform the market by a wide margin.

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