Leaders-Laggards

Industrials remain one of the best-performing sectors of 2022, but this could also be a case of it just being a matter of time. The story with the materials sector is similar to that of industrials. The utilities sector continues to pick steam along with most other areas of the market.

The Treasury rally has taken a bit of a breather, but this week will clearly be a big one for it. Energy stock prices are finally starting to catch up to the decline in oil prices and I suspect there’s more room to go. The outlook for tech still doesn’t look good and may not for another few months. We may be nearing an important inflection point for small-caps right now.

The overall trend here is still towards utilities outperformance, but its behavior has been admittedly pretty choppy. If the November inflation number falls again next week, it could ignite worries that the Fed will overshoot, further strengthening the case for Treasuries. Why are TIPS outperforming even red-hot Treasuries?