Chart of the Day - Thursday, June 3rd, 2021

Today’s Chart of the Day was shared by Steve Strazza (@sstrazza). The chart shows the relative strength of Financials ($XLF) and Energy ($XLE) over the past year (relative to the S&P 500). These are the top two sectors so far this year. Energy is up 47% year-to-date, while Financials are up 30%. For reference, the S&P 500 is up 12% and Tech is up less than 6%, over the same period. Steve points out that the majority of investors are not positioned for an environment where these two value-oriented sectors outperform. In a comment to The Chart Report, Steve said,  "Financials and Energy have been left for dead by investors due to their chronic underperformance over the past decade. But so far in 2021, both sectors are notably outperforming the S&P and look poised to continue doing so. The fact that most investors are underweight these sectors, to me, is bullish. If they continue to outperform as they have been, we'll likely see performance chasing ensue as investors seek to gain more exposure to these areas of the market, keeping them well-bid for quite some time.