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Sector Performance
The markets have been in a funk for the past six weeks, and are now well off their recovery highs that were reached in July. In that time frame, there have been some particularly volatile days, with moves of up-400 followed by down-400, and on share trading volumes that were much higher than average.
We last looked at sector performance about two months ago. Since then, the percentage gains are all lower compared to a year ago, and there are even sectors in negative territory. There are also some significant drops from the 2011 highs.
Canadian Performance: In terms of sector rotation over the past two months, Health-Care held onto the top spot, but is tied with Telecommunications (both +12% Y/Y). Materials rebounded from sixth to third (+11% Y/Y). Utilities held onto fourth (+8% Y/Y). Information Technology, Energy, and Consumer Discretionary fared the worst. These three sectors also declined the most from the 2011 highs. The “safer” sectors fared best: Telecommunications, Utilities, and Consumer Staples.
U.S. Performance: The U.S. performance is quite different. The biggest divergencies are Consumer Discretionary and Telecommunications. Materials and Energy have stood up well, although Energy has shown a sharp contraction from its high for the year. The strong performance by Consumer Discretionary reflects the propensity of those people with wealth to continue to spend lavishly. Financials is the only sector down from a year ago, and also had the largest drop from the 2011 high. The U.S. banks continue to cause concern, largely owing to their considerable loan exposure to Europe.
