Sector Rotation: Healthcare XLV Should Be The Next Stop

2026-02-26 16:54:07 ET

Market's Rotation to Value

With the FQ4 earnings reports from hyperscalers (especially from Nvidia’s report yesterday), high-multiple growth stocks have been and are experiencing heightened downward volatilities. As investors retreat from the volatility of the technology sector, they are taking refuge in traditional defense sectors, judging by what I see on our market dashboard (BTW, you are welcome to download it), as shown below. As seen, among the top-performing sectors in the past 3 months in terms of price change, 3 of them have a strong defensive nature. XLE and XLB are the top 2 in price performance, and the valuation of both sectors is based on hard assets to a large extent. The 4 ^th best performance was observed in consumable staples XLP. All these sectors have posted double-digit price returns in the past quarter, while broader market indices (such as the DJI , SP500 , NASDAQ , and also small-cap RTY ) faced downward pressure....

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