LIVE MARKETS-Cyclicals freeze up in December, but is a thaw around the corner?

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CYCLICALS FREEZE UP IN DECEMBER, BUT IS A THAW AROUND THE CORNER?

Outside of monthly gains of around 1%-4% in the three FANG .NYFANG sectors, tech .SPLRCT, communication services .SPLRCL, and consumer discretionary .SPLRCD, the other eight S&P 500 .SPX sectors are all sharply negative this December.

With this, more traditional industry/value-oriented groups have been especially weak.

Indeed, materials .SPLRCM, real estate .SPLRCR and energy .SPNY are all suffering losses of more than 10% just this month.

Materials (-10.9%) and energy (-12.5%) are both on track for their biggest monthly declines since June 2022, while real estate (-11.3%) is on pace for its biggest monthly drop since September 2022.

Additionally, there are some pronounced losing streaks among these sectors that are still in play.

The energy sector has fallen six-straight sessions for its longest losing streak since another six-day losing streak in April of this year. Energy suffered a seven-day run of losses in October 2023.

Real estate is down eight days in a row for its longest losing streak since a nine-day losing streak that ended in March 2017.

That said, materials is on a record run of losses. The group has now fallen 14 days in a row, which is its longest stretch without a gain using LSEG data back to September 1989.

With this, material's 14-day Relative Strength Index $(RSI)$ has plunged to 15.869, which stands as the second most oversold reading in the group's history.

The lowest reading ever for materials was 15.763 on Aug. 8, 2011. Of note, back then, materials then rallied as much as 13% over the next 17 trading days.

In any event, and perhaps not surprisingly, given the current action, growth .IGX is enjoying its best month vs value .IVX since June 2000:

The IGX/IVX ratio is now up 9.25% in December vs a 10.185% rise in June 2000. That June 2000 gain counts as the best month ever for growth relative to value using LSEG data going back to summer 1995.

Of note, on a monthly basis, June 2000 marked a ratio top. Growth then underperformed Value into the ratio's May 2007 trough.

(Terence Gabriel)

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FOR FRIDAY'S EARLIER LIVE MARKETS POSTS:

U.S. STOCK FUTURES PARE LOSSES AFTER PCE - CLICK HERE

FIVE CREDIT STATS - CLICK HERE

STOXX HEADS FOR BIGGEST WEEKLY DROP SINCE EARLY SEPT - CLICK HERE

EUROPE BEFORE THE BELL: TRUMP WARNS EUROPE - CLICK HERE

ONE LAST HURDLE REMAINS FOR THE YEAR - CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)