Global Relative Strength Conditions, 4/12/2018

April 12, 2018  |  Michael Reilly

U.S. Equities are still the #1 ranked Asset Class by relative strength.

Within U.S. Equities, Technology remains the #1 strongest sector, and Financials remain the #2 strongest sector on a relative strength basis. Industrials are still #3.

International Equities are the #2 ranked Asset Class. They continue to close the gap on the leader (U.S. Equities).

Within International Equities, Europe Emerging has dropped from the first position to the fourth. The top three international sectors are Asia-Pacific Emerging, Latin America, and Asia-Pacific Developed.

Six Major Asset Classes

Ranked in order of relative strength:

  1. U.S. Equities
  2. International Equities
  3. Commodities
  4. Fixed Income
  5. Cash
  6. Currencies

We always focus on the top two strongest asset classes in terms of RS (U.S. Equities and International Equities).

We then highlight the top two strongest sectors, in terms of relative strength.

U.S. Equities

Note that the strongest groups in terms of RS are not always the top groups in terms of performance.

For example, Technology and Financials (highlighted) are the two strongest sectors on a relative strength basis, yet they delivered the lowest one-month performance.

U.S. Sector Performance

Sector/ETF 1-Month 3-Month 6-Month 12-Month
Energy (RYE) 2.78% -9.72% 3.83% -5.71%
Utilities (RYU) 0.70% -1.05% -6.81% -3.81%
Real Estate (EWRE) -0.39% -2.23% -7.16% -5.36%
Consumer Cyclicals (RXI) -1.39% -1.43% 9.38% 17.68%
Consumer Staples (RHS) -3.57% -5.03% 2.08% 0.25%
Industrials (RGI) -4.03% -5.89% 3.29% 14.74%
Telecom (XTL) -4.00% 1.16% 0.51% 2.16%
Basic Materials (RTM) -4.67% -8.71% 1.45% 13.65%
Healthcare (RYH) -5.21% -4.82% 1.54% 12.28%
Financials (RYF) -5.11% -4.11% 5.41% 18.64%
Technology (RYT) -5.95% 0.86% 9.70% 27.75%

International Equities

The table below highlights the performance of the six sectors representing the International Asset Class.

Again, highlighted are the top two strongest sectors based on relative strength. They also happen to be the lowest performers over the last month.

International Sector Performance

Sector (Fund) 1-Month 3-Month 6-Month 12-Month
Midde East (GULF) 2.27% 4.62% 8.68% 9.18%
Eur Dev (EZU) 1.12% -1.53% 1.74% 19.11%
Asia Pac Dev (IPAC) -1.22% -3.87% 4.37% 14.32%
Eur Emrg (TREMX) -2.76% 0.12% -2.31% 22.76%
Africa (AFK) -1.62% -0.04% 7.30% 20.89%
Asia Pac Emrg (EEMA) -1.97% -2.38% 4.23% 24.95%
Latin Am. (ILF) -2.74% 3.10% 5.17% 18.01%

The top two strongest groups, in terms of relative strength, are not necessarily the top two groups in terms of comparative performance (i.e., 1-month, 6-month, etc.).

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