From the desk of Willie Delwiche.
Key Takeaway: Fed-fueled volatility exposes weakness beneath the surface. Breadth trends at odds with index-level resiliency. Drop-in yields and defensive sector leadership consistent with elevated risk environments.
- Last week’s volatility produced a shake-up in our relative strength rankings. Materials and Financials both saw big drops, while Technology and Communication Services surged into the lead.
- Looking beyond the cap-weighted S&P 500 sectors shows a less decisive shift in leadership – Energy & Real Estate remain strong, both at the sector level and in terms of the industry group heat map.