Real estate continues to lead the market higher as it has throughout 2021. Cyclicals are continuing to get bounced, while investors have yet to commit to more defensive sectors. Of the major cyclical sectors, energy has held up the best thanks to rising crude oil prices and strong demand as we head into the summer travel season.

The good but not quite great recovery is becoming kind of the sweet spot for tech and other growth stocks. Energy stocks have finally recaptured their pre-pandemic levels and momentum continues to move in a positive direction. This is the longest streak of outperformance for international stocks since the 4th quarter of last year.

European banks continue to follow the uptrend of developed markets in general and could be looking at a slightly more advantageous environment compared to U.S. banks. TIPS have so far managed to maintain their strength. Again, there’s no real change in the tight relationship between junk bonds and Treasuries, which extends to more than two months.