Leaders-Laggards

Defensive sectors have been a bit of a mixed bag lately, but REITs continue to look strong. Tech continues its comeback and may be breaking out of the downtrend that it’s been in since the start of the year. There was a general concern that flat month-over-month sales and higher inflation could stifle discretionary spending, but both fears look like they could be soothing in the short-term.

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.