Tom McManus, Chief Investment Strategist for Bank of America, recently published a very interesting graph. It compares the performance of the S&P 1500 Materials-Energy-Industrials-Tech sectors vs. everything else. M-E-I-T is up over 10% year to date, while the rest of the market is DOWN 7% ytd!
This is reminiscent of the 1999 tech boom, when the overall indices were up big, but the S&P500 sans tech was actually down slightly. Certainly this has to do with the bet on global growth at the expense of US consumer.
The question here is whether such a divergence is sustainable. It wasn't in 2000 with tech. Clearly this isn't directly comparable but as a "reversion to the mean" proponent it raises a red flag in my opinion. (Thanks to Whitney Tilson for forwarding this data).