- Semiconductor-related stocks saw significant outflows last week, while software attracted investment.
- A historical comparison of the S&P 500 and semiconductor performance suggests a potentially more cautious market environment.
- Utilities are gaining relative strength in Canada and the US, while energy remains resilient.
Money is moving within the technology sector, with semiconductor-related stocks facing selling pressure as investors increasingly favour software and other areas of the market.
In the October 28 edition of Markets in Motion, Bruce Campbell of StoneCastle Investment Management examines recent fund flows, semiconductor performance and changing sector leadership across North American equities.
Data presented from Money Flows shows inflows into software last week, relatively balanced activity in hardware, and substantial outflows from chips, optics and equipment.
This article is being disseminated on behalf of StoneCastle Investment Management, a third-party issuer, and is intended for informational purposes only.
Campbell also examines a historical indicator comparing the S&P 500 with semiconductor stocks. When the broader index is favoured, historical average returns have been more modest than during periods of semiconductor leadership.
His analysis suggests investors may need to temper expectations for both the broader market and semiconductor performance.
Elsewhere, relative rotation graphs show Canadian financials beginning to recover from a period of weakness, while utilities are improving in both Canada and the United States as interest rates decline.
US consumer staples are also showing relative strength, healthcare is beginning to weaken, and energy continues to demonstrate resilience.
Watch the full video above for Campbell’s latest assessment of market momentum and the sectors attracting investor interest.
