How US sectors performed when the business cycle read contraction
Since 2 Jan 1985, the record reads this regime on 12.8% of trading days, across 3 episodes with a typical run of 507 sessions. Across those sessions since 22 Dec 1998, Consumer Discretionary did best at +15.5% a year and Utilities did worst at +0.4%, against +7.5% for the S&P 500.
Figures as of 6 Nov 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 | +41.5% | +11.3% | +4.2% | 59% | 20.9% | 251 |
| Real Estate XLREsince 2015 | +28% | +5.5% | -9.4% | 55% | 21.3% | 251 |
| Consumer Discretionary XLY | +15.5% | +10.6% | +8% | 52% | 29% | 1,350 |
| Materials XLB | +15.3% | +8.6% | +7.8% | 53% | 31.1% | 1,350 |
| Financials XLF | +14.5% | +7.9% | +7% | 51% | 44.3% | 1,350 |
| Industrials XLI | +11.3% | +9.2% | +3.8% | 52% | 28.4% | 1,350 |
| Energy XLE | +10.5% | +10.1% | +3% | 51% | 37.8% | 1,350 |
| Information Technology XLK | +8.5% | +11.8% | +0.9% | 52% | 32% | 1,350 |
| Health Care XLV | +7.9% | +8.8% | +0.3% | 51% | 21.8% | 1,350 |
| Consumer Staples XLP | +2.3% | +5.6% | -5.2% | 51% | 17.5% | 1,350 |
| Utilities XLU | +0.4% | +5.7% | -7.1% | 50% | 25.4% | 1,350 |
Context
| Asset | In this regime | All days | vs S&P 500 | Up sessions | Volatility | Sessions |
|---|---|---|---|---|---|---|
| S&P 500 SPY | +7.5% | +10.1% | — | 54% | 26.5% | 1,350 |
| Nasdaq 100 QQQsince 1999 | +11.2% | +12.9% | +3.7% | 54% | 31.6% | 1,350 |
| Russell 2000 IWMsince 2000 | +16.5% | +9.6% | +9% | 53% | 31.4% | 1,350 |
| Long Treasuries TLTsince 2002 | +2% | +1% | -10.5% | 51% | 15.5% | 1,167 |
| Gold GLDsince 2004 | +19.9% | +11.4% | +8.3% | 53% | 22.9% | 758 |
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 +15.5%, Materials +15.3%, Financials +14.5%. Annualised mean next-session returns since 22 Dec 1998; the S&P 500 returned +7.5%.
- How common is this regime, and how long does it last?
- It appears on 12.8% of trading days since 1985, in 3 separate episodes. The typical run is 507 sessions; the longest lasted 592 sessions.
- Is this regime in force today?
- No. It was last seen 11 May 2020 – 7 May 2021. 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.