It has been five trading days since “no-taper” euphoria has passed.
In that time, U.S. stock assets have been falling, though the declines have been modest.
Most investors continue to believe that a last-minute deal will be struck and that a bearish retreat like the 2011 correction is improbable.
Nevertheless, different economic sectors appear to be responding differently to the current landscape.
And while previous blueprints for budget uncertainty may have favored non-cyclical segments such as health care and consumer staples, old-school rules may not be applicable.
Granted, assets like SPDR Select Sector Materials (XLB) and SPDR Select Sector Financials (XLF) may be following the risk-off rules of investment anxiety. Nevertheless, it is rare to find safer havens like Health Care (XLV) and Consumer Staples (XLP) near the bottom of the barrel. Equally strange, it is a bit ironic to find economically sensitive Industrials (XLI) at the top of the leaderboard, let alone a volatile segment like Technology (XLK).