The Few, The Lowly, The Laggards

With less than two months left to go in 2019, the S&P 500 is sitting on a gain of nearly 23% YTD, and all but two of the index’s 24 industry groups are up by at least double-digit percentages. The two laggards are Energy (+4.5%) and Drugs and Biotechs (+5.5%), while the three strongest groups are all from the Technology sector (Tech Hardware: +44.8%, Semis: +37.7%, and Software: +32.8%). Surprisingly enough, Banks are even starting to move up the performance list as that group is up just a hair under 30% on the year putting it in fifth place on a YTD basis.

The table below lists where each of the S&P 500’s Industry Groups is currently trading with respect to its 50-DMA.While you would expect just about everything to be extended after the recent leg higher, that’s not the case. The S&P 500 as a whole is just 3% above its 50-DMA, and just five groups are more than 5% above their 50-DMAs.The two most extended groups are Tech Hardware (think Apple) and Banks. On the downside, there are actually as many Industry Groups trading below their 50-DMA as there are groups trading more than 5% above their 50-DMA. As shown at the bottom of the table, Consumer Services, Real Estate, Household & Personal Products, Commercial Services, and Utilities are all currently below their 50-DMAs.These aren’t groups that have been lagging the market all year. In fact, three of them are outperforming the S&P 500 on a year to date, but in the majority of cases, these are defensive-oriented groups that have fallen out of favor as the market’s sentiment has shifted and rates have risen.

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