From the desk of Willie Delwiche.
Key Takeaway: Even with bottlenecks & distortions, economic recovery & cyclical rally remain intact. Tactical risks have risen as the market digests gains of last year. Watch bond yields & global participation for evidence that the rally is ready to resume.
Cyclical value sectors remain the leaders in our relative strength rankings and small-cap groups continue to dominate the upper-tier of our industry group rankings. But there is evidence beneath the surface of shifting trends. Rather than seeing a reversion back to growth leadership in our sector rankings, we are seeing defensive areas of the market start to heat up. Consumer Staples, Utilities & Real Estate have the best relative strength on a short-term basis. At the industry group level, small-cap groups are deteriorating while large-cap groups are improving.
