Boring Can Be Beautiful

While U.S. stock averages continue to drift lower and high-flying Tech stocks remain under pressure, a handful of oft-forgotten sectors are coming to the fore. Defensive areas of the market outperformed during the first half of April.

Utilities and Real Estate combine to make up less than 6% of the S&P 500, but investors who’ve allocated more to the space are celebrating. The Utes are in the midst of one of their best runs of the last 20 years.

REITS just broke through resistance created by the September 2021 highs. Momentum put in a bullish divergence at the February lows and helped push prices back above a rising 200-day moving average. Now, the sector could be ready to challenge its year-end peak at the 161.8% extension from the COVID collapse.

Health Care has the same signature. It briefly set new highs earlier this month.

And it’s pretty hard to get excited about businesses selling toothpaste and toilet paper, but stocks of those companies are a different story. Consumer Staples are breaking out to all-time highs, and the sector hasn’t been oversold in more than a year.

Sometimes, boring can be beautiful.

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