Key points from the report:
- 18%+ gains for every major index since December lows; all but Russell 2000 are above 50- and 200-DMA.
- Sector performance is fairly tightly bunched, with all sectors within ~10% of each other. More divergence is very likely from here.
- Since 1970, the average spread between the best and worst sectors on an annual basis is 40%.
- Over the past six years, the average spread is 34%.
- On a relative basis, Utility is still easily the best performer over the trailing year and recently reached an historic extreme of +20% versus the S&P 500. The spread may be near a relative peak, especially if the worst of the 10-year yield slide is over.
- Material is by far the worst over the trailing year, lagging Utility by nearly 30%. The spread could be at a trough, but likely needs some economic improvement to revert.
- Technology is just slightly outperforming the S&P 500 over the trailing year but is trending positively (Semis and Software both working now). Retail still holds a large lead but continues to decelerate relatively.
- Energy’s relative trend is improving but still has some distance to make up before it becomes a leader.
