We’re fresh off a couple new trade deals, but stocks are merely limping to new all-time highs today. There’s quite a bit of froth in this tape as the rally approaches the four-month mark. At this point, we’ve got to ask: Can bulls keep this momentum going?
Underneath the surface, we saw a new sector pop into the leaderboard last week.
I have to say, it’s not the most bullish signal, but it could simply be part of a broader rotation. After all, it’s what keeps bull markets alive.
The Long-Term Trend is Getting Stronger
Healthcare, which has been the worst-performing sector year-to-date, finally showed signs of life last week. It’s traditionally considered as a defensive sector, so naturally, the question is whether this is a sign money is starting to take cover, or whether we’re just seeing a healthy rotation.
I must admit, I’m only interested in healthcare from the biotech standpoint. The sector has been dormant for years but still offers a lot of growth and innovative opportunities. I think it’s waiting on some key regulatory shifts before taking off again.
I remain impressed with the resiliency of the industrials sector, which is solidifying its place as the year-to-date leader. But let’s be real – it’s industrials with a tech twist.
Communications are the one-year leader, and this is bullish in of itself too. We remain in a dip-buying environment.
Talk soon,
-Gianni
