Sometimes market prices can provide the strongest signal for investors. In our view, what’s been working (and what hasn’t been working) in the stock market paints a clear picture of risk aversion even as the S&P 500 increased nearly 10% from the March 13, 2023, low to the most recent high.
Key Relative Performance Relationships since March 13 include:
- Consumer Staples outperformed Consumer Discretionary by 3.0%.
- Small Caps underperformed Large Caps by 7.1%.
- Gold outperformed Copper by 10.6%.
- Transports underperformed the S&P 500 by 8.0%.
- Healthcare outperformed the S&P 500 by 1.9%.
Banks, which we discussed in last week’s Two the Point, are another glaring example of performance trends that would be atypical at the beginning of a new bull market. In fact, this would be the first time in over 50 years that bank stock performance was negative six months after the S&P 500 made a cycle low. We continue to believe stocks will be stuck in neutral for the foreseeable future.
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