Aftermath of the Stock Market Correction: Defensive Sectors Lead the U.S. Market; Bear Market Worsens for International Equities

Rising interest rates and hawkish comments by the Fed caused a wave of deleveraging on a global scale. Investors pulled out rapidly from equities to reduce exposure, which caused the benchmark S&P 500 index to drop below its 100-day moving average:

spy.102018

The bear market in international equities, both Europe and emerging markets, accelerated to the downside:

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Clearly, smart money is rotating into defensive sectors, while technology, cyclicals, and materials continue to underperform.

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From the technical perspective, utilities look the best. The Fidelity Select Utilities Fund (FSUTX) made a new high yesterday, and we would not be surprised to see more investment money flowing into this defensive sector:

fsutx.102018.png

The relative strength for the telecom and the healthcare sectors is also positive:

fstcx.102018.png

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The materials and the semiconductor sectors stand out as the weakest performers in 2018:

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View fund rankings at FidelitySectorReport.com for more information.

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