Industrial Backbone?
This bull market has been one of powerful strength, and many sectors have been supporting the move. The “rolling bull” market has been helped by somewhat recent power in healthcare and the financials. Of course this rotation is a good sign, as it gives leading groups, like technology, a chance to rest. Below is one area that may be ripe for a bit of vitality. The ratio chart here of the industrials compared to the S&P 500, show how it has been left behind over the last one month period, as it is now just the 10th best acting group of the 11 major S&P sectors barely positive, ahead of only real estate. The XLI sits just 1% off most recent 52 week highs, and the ETF has CLOSED the last 6 weeks pretty tight with either an 81 or 82 handle. But on a YTD look back period, the industrials are still the THIRD best actor higher by almost 29% thus far in 2019. For that reason, and the overall backbone look for the space to witness some muscle into year end, and early Q1 ’20.