Leaders-Laggards

While the tech rally hasn’t fizzled out, it continues to show signs of tiring out. We’re still seeing investors spreading their bets out beyond just the growth sectors that have been leading. If a hike later this month truly is the last one of this cycle, it could open up Treasuries to behave more “freely” and act like a counter to equities. The downward pressure on the dollar is a condition that’s likely to persist for several more months.

The consumer discretionary sector has replaced tech as the most consistent outperformer in this market. The desire of investors to keep pushing valuations higher and higher on tech seems to have worn out. Higher interest rates are continuing to draw investors away from gold, but lumber looks like it’s finding its footing again.

With the choppy pattern of this chart and long-term Treasuries finally starting to gain a little ground, we could be at or near the peak of this year’s tech rally. It doesn’t really stand out on the longer-term chart, but gains in long-dated Treasuries are slowly standing out against still-rising rates on the short end of the curve. The summer isn’t the typical time when equities correct and incite a flight to safety trade.