Leaders-Laggards

Energy stocks remain a leader in this market and they’re starting to get some assistance from other cyclical sectors. This is the first notable uptick we’ve seen in the lumber/gold ratio since early August. Even though the dollar index continues to push higher, I still maintain that this can’t last much longer. A sustained rally for Treasuries may still be a few months away.

OPEC’s decision to cut crude oil production by as much as 2 million barrels a day was more than enough of a catalyst to push energy stocks up by more than 10%. Healthcare could be an interesting sector to watch here. Materials have rebounded nicely over the past two weeks as cyclicals swing back into favor.

Crude oil prices were up 9% in the past week and that was enough to push energy stocks higher despite the losses in the S&P 500. Staples managed to avoid the most severe damage that occurred in utilities last week, but it also didn’t provide the safety net that investors might have expected. Healthcare has turned into one of the market’s best performers over the past month.