Leaders-Laggards

Crude oil prices continue to head higher heading into the big summer travel season and that’s been enough to cement the energy sector’s status as market leader. Energy has gotten a lot of the attention, but materials remains one of the most durable sectors since the COVID market bottom. The utilities sector maintains its firm hold on market leadership.

The overall trend for energy stocks remains up, but last week proved rough as defensive issues took the lead. If Treasuries begin rallying here and lumber keeps pulling back, we could get the strongest risk-off signal of this entire correction. Treasuries are starting to build a little momentum finally.

I still think the latest run in utilities that goes back to last year is a bit overdone. As the economy creeps closer to recession and the Fed continues to push rates sharply higher, I’d expect dividend stocks to continue enjoying relatively favorable investor interest. Small-caps were especially volatile last week during the Fed-induced whipsaw.