The huge underperformance for banks so far this year has helped the S&P 500 Financials sector see its share of weighting in that broad index continue to collapse. From just shy of one-quarter of market cap in the mid-2000s to the mid-teens share most of the past decade, the S&P is now to a large extent “definancialized” as the share of its market cap accounted for by financial sector stocks is about as low as it has gotten in the past forty five years. Longer-term, there’s precedent for further declines, though. As shown in the chart below, Financials were less than 5% of the index back in the 1940s. While we aren’t predicting a return to that level, it can’t be outside the range of possibility given the collapse in Financials’ share over the past few years.  We’ve already seen the Energy sector’s weighting fall from 15% or so in the mid-2000s down to <3% as well.  We discussed this chart and other retail enthusiasm indicators in last night’s Closer report, which is available to Bespoke Institutional members.  Click here to start a two-week free trial.

In the past few days, the S&P 500 has made a lower high, unable to reclaim its early June highs. While price has not made a push higher, the index’s cumulative A/D line has.  The S&P 500’s cumulative A/D line reached its highest level since February 21st on Monday before yesterday’s weak breadth led to a slight drop. As for the individual sectors, Consumer Staples, Financials, Health Care, and Materials are all experiencing the same dynamic in which the cumulative A/D line has made a new high while price has not done the same.

On the other hand, Consumer Discretionary has seen the opposite occur in which price has made a new high, but the cumulative A/D line has not confirmed the move as it sits firmly below its prior highs from early June. As for the other sectors like Technology, Real Estate, and Utilities, these have seen price and breadth moving hand in hand with one another.  For Tech, those trends have been upwards while the more defensive Real Estate and Utilities sectors have been trending sideways at best in recent months.  Click here to view Bespoke’s premium membership options for our best research available.

Each Tuesday we publish an update of our Bespoke Stock Scores which ranks the constituents of the S&P 1500 based on our proprietary fundamental, technical, and sentiment indicators. This week, several of the top-scoring stocks are eyeing breakouts to new 52-week highs which we show in the charts below.  Semiconductor manufacturer Axcelis (ACLS) took the number one spot in this week’s Stock Scores as it stopped just short of a breakout above its February highs yesterday. Although it reversed at that resistance, it remains above its moving averages and is in an uptrend over the past few months.  It is a similar story for other stocks like Regal Beloit Corp (RBC), Molina Healthcare (MOH), Kroger (KR), and Domino’s (DPZ) which have also been sitting right around resistance at the past few months’ highs.  KR, MOH, and RBC have even seen small breakouts that did not hold. Meanwhile, another name with a high Bespoke Stock Score – Conagra (CAG) – broke out slightly to new highs in the past week before a small pullback with former resistance acting as support.  Today, CAG is headed higher off of its previous highs.  Click here to view Bespoke’s premium membership options to gain access to our Stock Scores report.