With interest and rates in the basement–the zeal for yield has driven desperate capital into heinously over-bought interest sensitive equities (financials, REITs) even as the more industrial sectors (materials, miners, energy) have appropriately sold off with the slowing global economy. A similar divergence in these sectors took place to start off the 2007-09 bear market. Dividend paying equities typically lag to the downside but they have not managed to decouple indefinitely from past down cycles.
Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.
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