Hitting new highs last week were a number of consumer non-cyclical (staples) stocks. Household names, including Kraft, Coca-Cola, JM Smucker, HJ Heinz, Unilever, and Hershey all made the new highs list. Meanwhile the major market averages have failed to regain their February peaks and show signs of breaking down.

The quantitative easing trade appears to be waning. We are seeing early indicators of a flight to safety. The high beta cyclical stocks are underperforming the market.  Non-cyclical stocks are now in favor.  The S&P 500 Consumer Staples index has recently broken out of a multi-month relative downtrend—outperforming the broader market by almost 8% over the last two months.