(Premium) Communication Services Sector Deep Dive – September

Sitting atop the sector leaderboard in 2023 is Communication Services. Just like most of the equity market during September, Communication stocks have faltered. But they’ve dropped somewhat less than most of the market over that period, putting their year-to-date gain at 36.9%. That’s more than triple the benchmark’s 11.8% rise for the year.

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(Premium) FICC in Focus – September

What do we want to own?

That’s the question we ask ourselves every day. Stocks? Bonds? Commodities? Crypto? Cash? The answer doesn’t have to be like flipping a light switch. It’s not like we want to be all in on stocks on Monday, then all in on Treasurys by Tuesday afternoon. Instead, the answer to “What do we want to own?” evolves slowly over time. Our minds gradually change as new evidence comes in, and our decisions follow those slowly-formed opinions.

Stocks have been the place to be since last fall. There’s not much argument about that. In recent weeks, though, the tide seems to have turned in favor of other asset classes. Commodities are leading the way. Check out the ratio of the Invesco DB Commodity Fund (DBC) vs. the S&P 500 below. We’ve broken the downtrend line, momentum just reached overbought territory for the first time all year, and the ratio crossed above the 200-day moving average. It’s a bit early to definitively call this the start of a new uptrend, but at the very least, this year-long downtrend has weakened considerably.

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Top Charts from the Consumer Staples Sector

The Consumer Staples sector has hovered near the flat line all year, despite a big gain for the benchmark S&P 500 index. Only the Utilities have turned in a worse performance so far in 2023.

Perhaps the final quarter of the year will be a different story? October, November, and December have historically been the best months of the year to own the Staples, so they’re worth watching closely for any signs of a bounce.

Continue reading “Top Charts from the Consumer Staples Sector”

(Premium) Health Care Sector Deep Dive – September

The Health Care Sector is near the bottom of the year-to-date sector derby. The benchmark S&P 500 index has risen 16.8% before dividends, but that gain hasn’t been broadly distributed. Health Care stocks are down 2%.

The problem isn’t really that Health Care is in a downtrend. The problem is there’s no trend at all.

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(Premium) Utilities Sector Deep Dive – September

It’s tough to outperform at all when you’re mired in a protracted downtrend. The Utes are stuck on the left side of the weekly Relative Rotation Graph, alternating between the ‘Lagging’ and ‘Improving’ quadrants, but never reaching the ‘Leading’ one.

It’s a trend that’s been in place for the last 15 years.

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(Premium) Consumer Staples Sector Deep Dive – September

If we’re going to see the Consumer Staples bounce, it’ll need to start with an improvement in breadth.

Today, nearly three-quarters of the sector’s constituents are in long-term technical downtrends, while the other quarter remain in technical uptrends. But things are deteriorating on a short-term basis, where just 1 in 10 are in short-term technical uptrends.

The sector will need to turn things around in short order if it’s to have any hope of riding a fourth quarter rally.

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