Image Source: Pixabay

While stocks are getting off to a quiet start to December, the S&P 500 staged a solid recovery in the final week of November to manage a modest 13 bps gain on the month. Below, we show the performance spread of each S&P 500 sector versus the overall index in November.  As shown, a majority of sectors actually outdid the index during the month with only Technology, Consumer Discretionary, and Industrials having underperformed. Tech in particular was a significant underperformer given it's oversized weight; the monthly performance spread ranked in the bottom decile of all months since 1990. Conversely, Materials, Consumer Staples, Communication Services, and Health Care's performance relative to the S&P 500 ranked in the top decile for all months since 1990. Health Care beat the S&P by nine percentage points in November, which was in the 98th decile for all months since 1990.

As shown below, it has been exceptionally uncommon for Health Care to outperform the broader market by such a wide degree. The last time the sector's one-month outperformance was nearly as strong was in March 2020 when it outpaced the S&P 500 by a slightly smaller 8.54 percentage points. Prior to that, the only period with 9 percentage points or more like this November was a string of months in 2000 and 2001. Additionally, we would note that this latest big month for Health Care came only six months after one of its worst months on record versus the broad market; in May the sector fell 5.7% versus the S&P 500's gain of 6.2%.

Health Care fell almost 1.5% yesterday to start off December and is again weak today. That was the sector's first decline on the first trading day of a month since May.  As shown below, that ends the longest streak of daily gains on the first day of a month since a seven month long streak ending in July 2017.

Switching over to a different sector, Communication Services also fell yesterday with an over 1% decline.  That extends a losing streak of declines on the first day of a month to six months. Given the sector reshuffling in 2018, Communication Services has a different makeup today than it did in the years prior to the reshuffling.   With that caveat in mind, there has only been one other period in which it fell on the first day of a month each month for half a year: October 2006 through March 2007.

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