From the desk of Willie Delwiche.
Key Takeaway: Index level highs lack support beneath the surface. Bonds rally in the wake of hot inflation data. Households own relatively few bonds, the Fed has never owned more Treasuries.
- Health Care moved up three spots in this week’s relative strength rankings, but has yet to crack the leadership group. Industrials sector continues to slip in terms of relative strength.
- Both our sector and industry group relative strength studies show Energy and Real Estate as areas of emerging leadership across the size spectrum.
- With Consumer Staples and Utilities still near the bottom of the rankings, it’s hard to make the case for a decisive shift toward defensive leadership in the equity markets.