A measure of market sentiment...

With the recent slump in stock markets across the globe, many are now technically considered to be in bear territory (defined as more than a 20% drop from a peak of less than year). This is further confirmed by looking at global sector performances as depicted in the bar chart graph below. The red bars show the one year performances of the various sectors, whilst the blue bars represent the performances since the start of this year. A "defensive" sector rotation can be seen from the performances. We see, for example, utilities, heathcare and consumer staples as amongst the least battered by the current turmoil. We also observe performance characteristics that are highly specific to this particular downturn. Information Technology, a traditionally growth industry, has done relatively well, benefitting from its export orientation and the weaker dollar. Financials have been battered as a result of the subprime crises and all that has ensued. Energy and materials in contrast find themselves in positive territory because of the significant demand and supply imbalances in commodities that have been driving their prices up through the roof.