The Big Picture
If you only checked the S&P 500’s year-to-date return of roughly 0.7% through the end of February, you’d think nothing happened. You’d be wrong.
Beneath that flat headline number, one of the most dramatic sector rotations in recent memory is playing out. Sector dispersion — the gap between the best and worst performing sectors — has reached the 99th percentile of historical norms, meaning the spread between winners and losers is wider than it’s been in virtually any two-month stretch on record. The “old economy” sectors of Energy, Industrials, and Consumer Staples are posting double-digit YTD gains, while Information Technology, the market’s dominant sector by weight at 33.4% of the index, has declined roughly 3–4% over the same period.