Investors are playing more defense with their stock market portfolios. Even as stocks rebounded on Tuesday, history suggests that a good defense may continue to be a good offense over the next month.
The move into risk-off stocks is highlighted by the strength of utility stocks, now the best-performing sector of 2020. The move into utility stocks began before the Chinese coronavirus hit the markets hard, but has accelerated since fears of a global economic slowdown ticked up on fears of a pandemic. A CNBC analysis of recent trading history suggests that the utility sector should continue to benefit from a more risk-averse market.
According to hedge fund analytics tool Kensho, the defensive trend should continue for at least another month.