Not exactly the emerging leadership you want to see, but staying patient through this correction has been the key. $XLU $XLP pic.twitter.com/DjIKR0V8M1
— Matthew Timpane, CMT (@mtimpane) December 13, 2021
Today’s Chart of the Day was shared by Matthew Timpane (@mtimpane). The chart shows the Utilities sector (black) and the Consumer Staples sector (blue) over the past two years. These two defensive sectors have been the strongest areas of the market over the past two weeks. Staples broke out to all-time highs last week, while Utilities are attempting to do the same. Not to mention, other defensive sectors like Real Estate and Health Care have also been firming up recently. Investors often flock to defensive sectors during times of economic stress or uncertainty. The idea is that even in hard economic times people will continue to consume the goods and services that these companies offer. Seeing this clear shift from offense to defense sets a risk-off tone to the broader market as it represents a flight to safety and a lack of risk appetite among market participants.