Leaders-Laggards

Defensive equities continue to take over, but it’s still a matter of just falling less than the broader market. It’s impossible to start a discussion about the dollar without talking about what’s going on with the pound. A lot of the pressure in Treasuries is also coming from liquidity being pulled out of the market and a relative lack of dollars available globally.

Utilities remain perhaps the best and most consistent performer of any sector in the market today. Even as other defensive sectors outperform, consumer staples is stuck in a bit of a rut here. Energy stocks may be putting in a short-term top here as crude oil and natural gas prices continue to trend lower.

Even as short-term leadership began moving from cyclicals back to growth last week, utilities remains perhaps the steadiest outperformer in the U.S. equity markets. Energy was easily the market’s worst performer, which would be notable if the trend continues. Even as inflation rates decelerate and the evidence for recession grows, Treasuries still refuse to behave like a risk-off asset.