Healthcare and Staples Part Ways

Here’s something interesting I’ve noticed, but I’m not yet sure of its significance. The healthcare sector and consumer staples sector usually follow each other closely. This makes sense since both are defensive sectors that tend to weather recessions better than other groups do.

Recently, however, the Healthcare ETF (XLV) has climbed higher while the Staples ETF (XLP) has been rather sluggish. On the chart below, the gap doesn’t appear to be that wide, but relative to how they usually behave, it’s quite a jolt — and it’s getting wider nearly every week.

What could be going on? Perhaps the market is responding to Obamacare. Or maybe something’s wrong with the staples. Or maybe the two groups are just out of whack and will come back momentarily. I honestly don’t know, but I try to pay attention whenever the market sends out an anomaly.

Posted by Eddy Elfenbein on October 3rd, 2013 at 12:33 pm

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