MONTHLY SECTOR RANKINGS SHOW DEFENSIVE LEADERSHIP THAT INCLUDES UTILITIES, HEALTH CARE, REAL ESTATE, AND CONSUMER STAPLES -- GOLD MINERS LED MATERIALS HIGHER -- HOMEBUILDERS ARE LEADING CONSUMER DISCRETIONARY SECTOR HIGHER TODAY

MONTHLY PERFORMANCE SHOWS DEFENSIVE LEADERSHIP...Chart 1 is taken from the Sector Summary page for the past month. And it shows that investors are still gravitating toward defensive issues. Four of the top sectors are utilities, health care, real estate, and consumer staples. All four are defensive in nature. Even the month's strongest sector has a defensive tilt. Materials were the month's strongest sector. But it was led higher by gold miners which rallied on the back of a stronger gold market. Gold has been rallying along with other traditional safe havens like Treasury bonds and bond proxies like staples, utilities, and REITs.

One Month

GOLD MINERS LEAD MATERIALS HIGHER...Chart 2 drills down into the materials sector to show Gold Mining stocks taking the top spot for the past month. It's also noteworthy that some of the month's weakest groups were industrial metal stocks like aluminum, steel, and copper (nonferrous metals) which have weakened along with those commodities. A rebound in that economically-sensitive sector would normally be a vote of confidence in the economy. In this case, however, industrial metal stocks tied to the global economy (and China) are lagging behind. While gold miners, which are more defensive in nature, are the sector's strongest group. That doesn't show confidence in the global economy. If anything, gold leadership shows some loss of confidence.

One Month

CONSUMER DISCRETIONARY IS WEEKLY LEADER...Switching over to the past week, Chart 3 shows the Consumer Discretionary SPDR (XLY) in the top spot this week. There's an interesting twist to that cyclical leadership as well. And it fits the theme of money moving to parts of the market that benefit from falling interest rates. That certainly includes homebuilders.

One Week

HOME CONSTRUCTION LEADS CYCLICALS HIGHER...One of the benefits of the Sector Summary page is that it allows us to drill down into each sector to see where the real leadership lies. A breakdown of the XLY today shows Home Construction right on top. With home improvement retailers right behind. That shouldn't be too much of a surprise because mortgage rates have been following the 10-Year Treasury yield lower, and have now fallen to the lowest level in twenty months. That's good for home buyers. And home builders. Right on cue, U.S. Home Construction iShares (ITB) hit a new high for the year today (See Chart 4).