The S&P 500 may be hitting record highs at a pace of more than once every other day, but would you believe that there are still Industry Groups trading below their 50-day moving averages? The chart below shows the rolling percentage of Industry Groups trading above their 50-DMAs over the last several years, and the current reading stands at 91.7%. Over the last five years there have been numerous periods where a higher percentage (and even 100%) of Industry Groups traded above their 50-DMAs, and the most recent was back in July.
So which are the two outlier groups that are still below their 50-DMAs? Well, when everyone seems to be taking an offensive posture in the market, it’s only natural that defensive sectors would be lagging, and two of the most defensive-oriented sectors in this yield-hungry world we live in are Utilities and Real Estate. Even these two groups, though, are only about 1% below their 50-DMAs, so all it will take is one or two good days for these groups to get them back over the hump. On the upside, Health Care Equipment & Services is the furthest above its 50-DMA at 7.72%.
The S&P 500 as a whole is currently just over 4% above its 50-DMA. What’s interesting to note here, though, is that just 9 of the 24 Industry Groups are further above their 50-DMAs while 15 are not above their 50-DMAs by as much as the S&P 500. In terms of YTD returns, the S&P 500 is currently sitting on a gain of more than 25% YTD. Leading the way higher this year, Tech Hardware (Apple) has rallied just under 48%, while Semis are up just over 40%. Behind these two leaders, four other Industry Groups are up over 30% YTD. While there is no downside on a YTD basis, Energy has been the biggest laggard and is just barely hanging on to a YTD gain. If Energy can’t hang onto a YTD gain in a year where the S&P 500 gains more than 25%, Energy investors may need to wear paper bags over their heads. Sign up for Bespoke’s “2020” special and get our upcoming Bespoke Report 2020 Market Outlook and Investor Toolkit.