How US sectors performed when the business cycle read contraction
Since Jan 3, 1983, the record reads this regime on 16.4% of trading days, across 44 episodes with a typical run of 8 sessions. Across those sessions since Dec 22, 1998, Consumer Discretionary did best at +21.6% a year and Utilities did worst at +5.8%, against +12.1% for the S&P 500.
Figures as of Sep 23, 2026 · recomputed every trading day
The regime in the record
Sector by sector
Annualised mean return on the session after each regime day. Sorted by the regime figure.
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| Communication Services XLCsince 2018 | +31.4% | +12.3% | +4.6% | 61% | 34.8% | 213 |
| Consumer Discretionary XLY | +21.6% | +10.4% | +9.5% | 53% | 30.7% | 1,429 |
| Information Technology XLK | +19.5% | +12.4% | +7.4% | 54% | 31.5% | 1,429 |
| Industrials XLI | +17.3% | +9.4% | +5.2% | 53% | 31.7% | 1,429 |
| Materials XLB | +16% | +8.5% | +3.9% | 53% | 33.7% | 1,429 |
| Health Care XLV | +11.6% | +8.5% | -0.6% | 52% | 23.2% | 1,429 |
| Financials XLF | +9.3% | +7.8% | -2.9% | 50% | 46.1% | 1,429 |
| Consumer Staples XLP | +9.2% | +5.3% | -3% | 53% | 19.2% | 1,429 |
| Energy XLE | +9% | +10.2% | -3.2% | 52% | 40.9% | 1,429 |
| Utilities XLU | +5.8% | +5.4% | -6.3% | 51% | 25.3% | 1,429 |
| Real Estate XLREsince 2015 | +3.4% | +5% | -24% | 50% | 41.8% | 219 |
Context
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| S&P 500 SPY | +12.1% | +10.2% | — | 54% | 27.9% | 1,430 |
| Nasdaq 100 QQQsince 1999 | +23.6% | +13.4% | +11.5% | 54% | 31.4% | 1,429 |
| Russell 2000 IWMsince 2000 | +14.4% | +9.8% | +2.2% | 52% | 34.1% | 1,429 |
| Long Treasuries TLTsince 2002 | +2.4% | +1% | -8.4% | 51% | 18.8% | 1,310 |
| Gold GLDsince 2004 | +16% | +11.7% | +5.4% | 55% | 21.2% | 1,288 |
How this regime is defined
Fundamental cycle reads Contraction in the daily regime record.
Method and limits
Descriptive statistics over the published regime record — not a backtest, a forecast or advice. Each regime day is credited with the NEXT session's return, so a regime never earns the move that revealed it. Returns are ETF price returns (dividends excluded), annualised as 252 × the mean session return; volatility likewise. Sector funds start in December 1998 (Real Estate in 2015, Communication Services in 2018); the regime record starts in 1980. Labels are the engine's as currently published and are recomputed when its method improves. A figure with fewer than 60 sessions is not shown.
This page's data as JSONQuestions
- Which sectors did best when the business cycle read contraction?
- Consumer Discretionary +21.6%, Information Technology +19.5%, Industrials +17.3%. Annualised mean next-session returns since Dec 22, 1998; the S&P 500 returned +12.1%.
- How common is this regime, and how long does it last?
- It appears on 16.4% of trading days since 1983, in 44 separate episodes. The typical run is 8 sessions; the longest lasted 988 sessions.
- Is this regime in force today?
- No. It was last seen May 1, 2025 – May 19, 2025. The daily nine-axis reading is on the Regime Radar.
- Is this a backtest?
- No. It describes how assets behaved on the session after each day the regime was read, with no portfolio, costs or selection. A backtest would test a rule; this records a history.