Breaking free of market beta is proving to be difficult these days, which isn’t surprising during a broad-based market correction. There have been some exceptions in recent history, but looking at stocks through a sector lens at the moment still suggests a risk-off state prevails across the board, based on a proprietary analytical framework that quantifies trend (see here for methodology details).
Energy has been an upside outlier, but the trend has recently gone into reverse and today’s analysis (based on prices through July 5) suggests it’s still prudent to stay defense in this corner. Ditto for the rest of the sector field. Some sectors may be close to shifting to a bullish profile — consumer staples (XLP), for instance. But it’s too early to make that call.
In short, the outlook for all the sectors range from a cautious neutral to outright bearish. ■