Chart of the Day – Monday, April 8, 2024

The Tech sector’s relative strength has actually been trending slightly downward for the last few weeks.

Communication Services, Energy, Financials, Industrials, Materials, and Utilities have all seen pick-ups in relative strength over the same time frame. pic.twitter.com/vIXmh54M7G

— Bespoke (@bespokeinvest) April 8, 2024

Today’s Chart of the Day was shared by Bespoke (@bespokeinvest).

• The largest sector of the S&P 500 (Tech) is lagging this year, yet the index is hovering near record highs. Tech’s relative performance peaked on Jan. 24th and is currently at a three-month low.

• While Tech has underperformed, Bespoke points out that several other sectors, including Communications, Energy, Financials, Industrials, Materials, and Utilities, have perked up over the same period.

• Other sectors remain relatively weak, including Consumer Discretionary, Consumer Staples, Real Estate, and Health Care. All four are at or near multi-year lows versus the S&P 500.

The takeaway: The legendary Ralph Acampora once said, “Rotation is the lifeblood of every bull market.” It allows the leading sectors to correct or consolidate without dragging down the overall index.