Breaking Down the Year So Far

Here’s a look at the relative strength graph so far this year. I took each of the Total Return Indexes for the S&P 500 sectors and divided them by the S&P 500’s Total Return Index. I then set each one to 100 to start the year.

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In plainer terms, a rising line means a sector is beating the market and a falling one means it’s losing. I apologize if this chart is hard to read but it’s a good way to see what’s been working this year and what hasn’t. (I didn’t include telecom since it’s only a few stocks and I didn’t want to crowd the graph.)

Healthcare and Utilities ran out for a quick lead at the start of the year, but healthcare has been rather weak since. Materials stocks were strong in February. Starting in March, Energy stocks started coming on strong. That probably explains some of the weakness in our Buy List since we don’t have any Energy stocks. The best performing sector YTD is Utilities (+18.655). The worst is Consumer Discretionaries at +0.6%.

Utility stocks started trailing the market in May, but have been leading the market over the past few weeks. In fact, a quiet theme this year has been the leadership tug-of-war between Utility stocks and Energy stocks. This probably reflects competing theses on the economy.

It’s also interesting to see how poorly Consumer Discretionaries have been doing. Bear in mind that this sector had been crushing the market for more than four years.

Posted by on July 1st, 2014 at 12:03 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.