Perma-bulls may note that the S&P 500 eked out a 0.4% gain in the first quarter of 2015. They may also choose to ignore warning signs such as the 5th consecutive month of decelerating economic activity in the manufacturing segment. The last time that this happened? 2008.
A quick check of the individual sectors that make up the overall market demonstrates that an increasing number of them are losing ground rather than gaining it. For example, the transporters in the iShares Transportation Average ETF (IYT) are collectively down 4.5% since the start of the year. Meanwhile, safer haven utility corporations comprising SPDR Select Sector Utilities (XLU) are down 5.2% in Q1, even with dividends reinvested.
| Bull Market, Bear Market or Barely Moving Market? | ||||||
| 2015 YTD% | ||||||
| SPDR Select Sector Health Care (XLV) | 6.3% | |||||
| SPDR Select Sector Consumer Discretionary (XLY) | 4.8% | |||||
| SPDR Select Sector Consumer Staples (XLP) | 1.1% | |||||
| SPDR Select Sector Basic Materials (XLB) | 0.8% | |||||
| SPDR Select Sector Technology (XLK) | 0.6% | |||||
| S&P 500 | 0.4% | |||||
| SPDR Select Sector Industrials (XLI) | -1.0% | |||||
| SPDR Select Sector Energy (XLE) | -1.3% | |||||
| SPDR Select Sector Financials (XLF) | -2.5% | |||||
| iShares DJ Transportations Average ETF (IYT) | -4.5% | |||||
| SPDR Select Sector Utilities (XLU) | -5.2% | |||||
Although some believe that the overall stock market has been handling the uncertainty of rate hikes as well as slower economic growth rather well, historical strength in longer-term treasuries might suggest otherwise. Consider the trend for iShares 20+ Year Treasury (TLT) in the six months prior to 2008. Long before the bull market in stocks became decidedly bearish, the demand for long-term treasury bonds began appreciating in dramatic fashion.
Does the trend toward acquiring long-term treasuries via TLT over the last six months resemble what transpired before the 2008 bear?