The market has found its legs this week and, for the most part, has regained where it was prior to the Brexit shakeup. How strong is this rally? One area that throws a warning flag would be what slices of the larger market that have moved higher. Two parts of the S&P 500 that have outperformed are consumer staples and healthcare. Both of these areas are considered more defensive portions of the S&P 500. Therefore, the S&P 500’s current growth is being largely propelled by generally more defensive investment plays.
More aggressive areas of basic materials and financials are lagging the general market rebound of the S&P 500. The chart below tells the story of the past week.
If groups like basic materials and financials can gain more momentum, then the prospect of the index moving above its current range-bound realm would be greater.