Discretionary Stocks Continue to Impress

Since the stock market made its recent high on April 2nd (in the S&P 500), there has been a noticeable shift in sector performance. As they often do during periods of market indigestion, defensive sectors such as Health Care, Consumer Staples, and Utilities have been outperforming. Meanwhile, the cyclical sectors of the market that had previously been leading are now underperforming. The notable exception among cyclicals is the Consumer Discretionary sector, which not only continues to outperform the broad market even during this correction, but is the best performing sector this year by a decent margin.