Gradual Shift Or Healthy Pause For Growth?
The chart below over the last week period, a very nascent move that still has some proving to do, shows how capital is being diverted from more growth areas to more cyclical areas. The question from the headline above should really be who cares? Is growth taking a healthy pause that it deserves, or is this the start of a move into “value” away from tech, discretionary, and communication services which have registered spectacular returns in the first half of 2023? Perhaps they can all work as breadth improves and remember rotation is a healthy thing. We could be simply witnessing the “rolling” bull market where groups pass the baton to one another as they vie and compete for leadership. And notice which sectors are lagging. The staples and healthcare are producing negative returns and utilities are fractionally higher over the last week. This is just what bullish market participants want to see.