Defensive Rotation or Just Rotation?

We've been talking about how we're just not seeing rotation into the most defensive assets. Japanese Yen, US Treasury Bonds and Gold just can't stop going down, particularly when compared to risk assets.

You can see that chart here.

But when we take a look at the more defensive sectors within US Stocks, we have seen a bid relative to the rest of the market over the past couple of months:

But is it enough to say that the trend has changed?

Are these no longer downtrends?

Is this evidence of major defensive rotation, like we saw in early 2020?

Or is this just what happens in bull markets where everyone gets a turn, even Staples and Utilities?

Let us know what you think!

We love to hear from you.

JC