S&P 500 Sectors and the Bull Market

We’re coming up on the fifth anniversary of the great Bull Market. Here’s a look at the relative strength of the S&P 500 sectors since the market’s low.

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So what is this chart? I took the total return index of each sector and divided it by the S&P 500 total return index, then set each one to start at 100 on March 9, 2009. If the line is rising, then the index is outperforming the market. If not, then it’s trailing. This way, you can see the make-up of the rally.

A few takeaways. The bull market was started by a huge rally in financials (see that early surge in the green line). To put this in perspective, the Financial Sector ETF ($XLF) doubled in two months. Of course, that’s after an epic collapse.

Even though the green line shot up so much so early, I think the bull market has been relatively evenly distributed. Sure, it’s not perfect, but I don’t see any gross imbalances like we saw with the tech bubble.

The consumer discretionary sector has been very strong, and consistently so. The outperformers have been financials, discretionary, industrials and tech. The laggards have been utes, telecom and energy. I’ve been a little surprised that tech (navy blue) has mostly been a so-so performer. Tech got left behind during much of 2012-13 and has only been a market leader during the last six months or so.

Posted by on March 3rd, 2014 at 9:19 am


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