Two-horned bull?
Mike Panzner points out that the bull has become two-horned , as laggards become leaders in recent days. Once the S&P 500 reached a new multi-year closing high of 1326.57 on 9/26 (beating the prior peak of 1325.76 that was reached on 5/5), the sector laggards began to play catch-up.
>
S&P500 Sector Performance
past month versus prior 3
Source: Michael Panzner, Collins Stewart
>
One theory: fund managers who had sat out the first phase of the bull
run scrambled to invest in stocks and sectors that had trailed behind,
in an effort to keep up.
This chart shows how the pre-9/26 sectors have fared, and how the markets have run since then:
>
| |
6/13 - 9/25 |
|
9/25 - 10/24 | |
| SECTOR | RETURN |
RANK |
RANK |
RETURN |
| Telecom Svcs |
15.63 | 1 | 9 | 2.10 |
| Info Technology |
11.82 | 2 | 6 | 3.88 |
| Health Care |
10.36 | 3 | 7 | 2.29 |
| Financials | 9.59 | 4 | 8 | 2.16 |
| Cons Discretionary | 7.95 | 5 | 3 | 5.94 |
| Cons Staples |
7.91 | 6 | 10 | 1.63 |
| Utilities |
6.63 | 7 | 4 | 4.96 |
| Materials |
6.61 |
8 | 2 | 6.24 |
| Energy | 5.17 | 9 | 1 | 8.48 |
| Industrials | 1.70 | 10 | 5 | 4.83 |
| S&P 500 |
8.39 |
3.85 |
>
Interesting stuff. Thanks, Mike.
Wednesday, October 25, 2006 | 10:30 AM | Permalink
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Comments
This was part of the reasoning behind the rise in dot-com stocks during the bubble then. An analyst would say, seriously, "well, Yahoo's shares went up 10% last month, but Excite's only 5%, so it's a good bet Excite will now rise faster to catch up..." And, lo and behold, they would! ;-)
Posted by: Bob_in_ma | Oct 25, 2006 11:02:07 AM
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