Market Sector Review: Extreme Market Bifurcation

2026-02-16 11:17:00 ET

Since the beginning of the year, we have discussed the “reflation trade” and its impact on specific market sectors. This past weekend’s newsletter also showed some of these more extreme returns in various market sectors since the beginning of the year. To wit:

“Despite what seemed like a rough week in the market, it really wasn’t as most sectors and markets, outside of technology, moved into very overbought territory on a short-term basis. Energy, Materials, Industrials, and Staples, or rather “value,” have strongly outperformed every other market and sector this year. These areas are the most overbought, and a rotation back to growth seems increasingly obvious.”

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