Sector Relative Strength: Financials, Consumer Discretionary Underperforming

Below we highlight the relative strength of each to the ten S&P 500 sectors over the last year. In each chart, rising lines indicate periods where the sector is outperforming the S&P 500. Charts with red shading indicate that the sector has underperformed the S&P 500 over the last year. Finally, in each chart we have also included red dots which indicate the four Fed rate cuts since August.

Of the ten sectors, only two (Consumer Discretionary and Financials) have underperformed in the last year, and neither of these sectors have seen any noticeable benefit from the four Fed rate cuts. Interestingly, the three sectors which have been the most positively impacted are Consumer Staples, Health Care, and Utilities, which are all defensive in nature. While it's probably too early to see if the most recent cut in rates has had any meaningful impact, the energy sector appears to have broken out of its recent congestion following Tuesday's cut.

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Comments

[deano]

So it sounds like the point you are making is that no matter what the Fed did with the rate, it made no significant difference in the various sectors. What then, pray tell, was the cause for all this crying and moaning by the market "experts" about how the Fed should have made more of a reduction??