In yesterday’s Sector Snapshot sent to Bespoke Premium and Bespoke Institutional members, we highlighted the relative strength charts below for a select group of sectors. These charts track the performance of the sector versus the S&P 500, so when the line is rising, it’s outperforming the market, and when the line is falling, it’s underperforming the market. We wanted to bring your attention to the swift directional change that the Health Care sector has experienced since the last FOMC meeting on September 17th (blue dots represent Fed meetings). Late September was also when Hillary Clinton made news regarding the high cost of some drug prices, so that impacted the sector negatively as well.
As you can see below, after a steady trend higher in relative strength for nearly a year, Health Care began rolling over versus the market a couple of months ago, and then took the elevator down over the last couple of weeks. While Health Care has been hit, you may be surprised to see that the growth-heavy Technology sector has not seen its relative strength dip; in fact, relative strength for Tech has been ticking nicely higher over the last month or so.