Leaders-Laggards

The energy sector is roaring ahead in a way we really haven’t seen since early on in 2021. Treasury yields have begun leveling off, but financials continue to push higher as the cyclical trade picks up steam. After lagging in a remarkably consistent fashion since the beginning of last summer, industrials finally staged a recovery versus the broader market.

It looks like tech’s turn at the head of the line may be coming to an end. Discretionary stocks have broken out in a big way over the past several weeks and, so far at least, it looks like they’re standing up to the Fed’s recent commentary. No sector is benefiting from the Fed’s somewhat hawkish stance on policy quite like the energy sector.

Real estate has ticked up once more and so far the “higher highs, higher lows” trend is tenuously hanging on. Global energy demand forecasts have generally looked positive and it looks like COVID infection rates are coming back down again. Treasury yields have been struggling to break out of their current range, but they are definitely gaining favor once again relative to stocks.