2026-01-10 07:34:57

Looking at a set of data, it's quite sobering. Small-cap essential consumer goods have fallen to historical lows relative to the Russell 2000 (PSCC/IWM), and large-cap essential consumer goods have also dropped to lows compared to the S&P 500 (XLP/SPY). In simple terms, whether it's the large or small caps, defensive assets like essential consumer goods are being heavily abandoned by funds.

Why is that? Because capital doesn't really favor defensive strategies right now. Where is the money flowing? Growth stocks, high-beta assets, things that can surge dramatically. Stable cash flow but limited growth, like essential consumer goods, naturally become less attractive. This reflects that the overall market's risk appetite is still high.

From the index performance, aggressive sectors like technology, cyclical, and discretionary consumer are still leading. But there's a hidden risk here—if macro expectations turn sour one day, or if volatility suddenly spikes, defensive sectors might suddenly catch up. That would be a signal of a market style rotation. So although defensive sectors look quite weak now, they might actually be the trigger for future style shifts.

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ShitcoinConnoisseur

· 01-10 08:04

Haha, the essential consumption sector has really become a big spender now, getting hammered hard. The defensive sector is now like an old man squatting in the corner, nobody pays attention, but I bet this wave will turn around sooner or later. The market now is just like a gambler's mentality, piling leverage on beta, eventually it will backfire, brother. I feel this style switch will come quite suddenly this time, and then it will be another bloody storm. The abandonment of the essential consumption sector actually hints that the market is still in fantasy mode; once expectations shift, it will be over. Funds are all piling into high-growth stocks this wave, defensive? Don't be joking, who cares about stable cash flow? Those still stubbornly holding onto tech stocks will eventually learn the lesson of XPEV, and the defensive sector is waiting to pick up the pieces.

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SlowLearnerWang

· 01-10 08:01

Once again, tech stocks are being crushed, and the defensive sectors' gains seem nonexistent... I should have known better than to listen to those "steady" nonsense.

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OfflineValidator

· 01-10 07:56

The defensive sector is so miserable, but this thing might actually be a signal before the black swan arrives. To be honest, always betting on high beta stocks will eventually backfire. Wait, is this logic suggesting a bottom signal? I'm a bit tempted. Funds just love high-risk bets; there's no such thing as stability. The defensive sector being squeezed to this point makes me think that the possibility is actually coming.

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AllInDaddy

· 01-10 07:52

The defensive sector is currently the "scapegoat" of the market, but I bet this is a prelude to a style shift signal. People all in growth stocks will eventually pay the price for this wave of aggression. The data is right there, both at historical lows, which is no coincidence. The real opportunity often hides in abandoned places. Risk appetite is high, but being at a high is the most dangerous position. The day the defensive sector catches up will be when I get on board. Currently, the defensively positioned assets that look like heavy losses might actually be the best hedge.

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GateUser-40edb63b

· 01-10 07:52

Currently, everything is about chasing growth, and the defensive sectors deserve to be neglected. When the market sentiment reverses one day, these sidelined assets might suddenly surge.

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