Leaders-Laggards

REITs are still driving higher here, although performance relative to the S&P 500 is moving sideways. Healthcare stocks are moving noticeably higher here for a few reasons. The word “taper” should be encouraging for banks since higher interest rates should be generally good for financials.

The utilities sector continues to pick up strength here in one of the market’s stronger risk-off signals. Investors have been positioning themselves more defensively and seeking out safe havens for months. Tech continues to underperform the market in what is looking like a larger shift away from growth stocks.

Utilities and Treasuries diverged in a major way on Friday. Tech stocks have begun flattening out relative to stock in general as the market searches for leadership again. Long bonds have underperformed over the past several trading days, but it’s still too early to overreact. Lumber prices are still searching for some firm footing.