My final post explained how the thought of investors in addition to traders regarding the economic scheme is reflected inward the relative surgical physical care for of diverse classes of bonds. Here we're looking at the relative surgical physical care for of stock marketplace sectors every 2d a barometer of sentiment. The relative forcefulness of consumer discretionary shares (XLY) reflects investor confidence inward economical strength. Conversely, when at that topographic point is worry that housing-related concerns in addition to rising prices weigh on consumer spending patterns, investors in addition to traders limited this outlook yesteryear selling consumer discretionary stocks.
We tin encounter from the nautical chart to a higher house that, subsequently a twelvemonth of steady underperformance relative to the S&P 500 Index (SPY), the consumer discretionary stocks bring gone into a relative forcefulness attain for 2008. After having late visited the superlative of that range, we're straight off seeing a pullback. This pullback inward relative forcefulness for XLY corresponds to a menstruum of economical concern, every 2d as good seen inward rising Treasury prices (flight to quality) in addition to continued negative intelligence regarding housing.
I volition endure watching this human relationship closely for indications of shifting economical thought amidst traders/investors.
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