I have always like to analyze the performance of each different sector to gauge where is the market.
We see healthcare being the top performer today followed by the real estate segment. Historically, real estates have always been another tool to hedge against inflation and thus, we can see that the investors are expecting inflation going forward. As for healthcare, it has traditionally being a defensive sector.
Interestingly, the technology sector came in third place. Nasdaq is back above 14,000 level for the third time this year. Whether it will ascend significantly above this level remains to be seen. If not, it should form a triple top on the chart which may spells a pullback soon. Of course, this remains to be seen and no one can be sure.
Financial stocks continued its retreat being the worst performing sector today. Interestingly, a rise in rates is favorable to financial stocks as it improves the NIM of banks. But we see market selling down the banking sector lately.
Materials had a good run this year and most probably, profit taking is taking place. As such, it was the second worse performing sector of the day.
With all the QE happening, not only are consumers flooded with cash, even companies are sitting on huge piles of cash. We see that in companies continuing their share buyback programs even in the midst of this recovery. I am expecting capex to increase but interestingly, the industrial was the third worse performing sector.
The two defensive sectors, consumer staples and utilities were also positive today. There might be some rotation into these sectors by institutions after seeing growth stocks rallying to highs again.
Lastly, we see consumer discretionary positive as well with most investors assured that we are currently still in the midst of a economic recovery.
That’s all for today’s market breakdown analysis and have a great Asian trading day ahead.