The Sector Race

What’s been the top-returning sector in the S&P 500 so far this year? Up until very recently, the answer would have been health care, which is up 32 percent on the year. But yesterday, the consumer discretionary sector slipped into the lead with a return of 32.5 percent.

Those sectors have both had very strong earnings seasons so far. Among health care stocks, 18 out of 23 stocks, or 78 percent, have beaten their earnings consensus this quarter, while 23 out of 30, or 77 percent, of consumer discretionary stocks have done so. Those figures both outpace the S&P 500 as a whole, in which 74.5 percent of companies have beaten estimates.

Health care stocks have slipped a bit lately in response to the faltering implementation of ObamaCare. But consumer discretionary stocks are strongly driven by holiday sales, so there’s still plenty of time for this race to turn around again.