Staples Attraction:

Looking at the top-performing major S&P sectors does not paint a pretty picture if you are a growth-related investor. The old debate of “growth versus value” comes to mind and the latter is winning. Over the last month’s period, the four best actors are defensive in nature with utilities, energy, consumer staples, and healthcare all up between 5-6%. If the last one-week time period was looked at real estate, another dawdler, was the second-best performer. I think you get the picture, and perhaps technology, discretionary and communication services are just taking a well-deserved breather, but if this nascent trend has legs it could put a damper on the “risk on” flavor that started the year off with a bang as the Nasdaq rose 10% in January. The ratio chart below comparing the XLP to the S&P 500 suggests that the group is feeling sprite and ready for higher PRICES. Brewers, nondurable household products, and personal products have led the way. I am not sure there is a better chart in any group at the moment than ELF which is on an 11-session winning streak and has dropped just 4 weeks in all of 2023 so far and is up nearly 400% since lows made last May at the very round 20 number.

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