Each time we’ve updated our sector and geographic relative strength work over the past few years, the stories remained the same for the most part. Since we last updated these charts, though, several notable shifts have begun to take place. It remains to be seen whether the shifts we’ll highlight below will persist. If they do, a number of institutional and individual investors might get caught flatfooted.

Briefly, as you can see with the sector charts provided below, the global Consumer Discretionary, Consumer Staples, Health Care, and IT sectors have significantly led the pack when it comes to performance over the past several years, while the Energy, Materials, Telecom, Utilities, Financials, and Industrials (to some extent) sectors have lagged. All of a sudden, however, Energy, Materials, Industrials, Telecom, and Utilities are all showing nascent signs of leadership (though Financials continue to wheeze) with Consumer Discretionary, IT, and Health Care starting to show signs of sustained relative underperformance. There have been some head fakes in the past. But, we’re cautiously optimistic that this time could be different considering many of the individual companies within these sectors are washed out valuation-wise and technically based on our single-stock work.

As for the geographic breakdown, though you’ll see a small upward blip up on the chart, the Emerging Markets index has begun to show some slight signs of life for the first time in at least two years. Alternately, the MSCI EAFE, representing international developed country stocks, remains in a rut (one day, the sun will shine on the EAFE, or at least we hope!).

The charts below show relative price performance of the individual sector and geographic MSCI indices vs. the overall MSCI World Index. Moves upward and to the right indicate relative outperformance over time against the index. Moves down and to the right indicate relative underperformance. We’ve also included the 10-week and 30-week moving averages for the relative strength lines to provide a more concrete visual for the intermediate term trend.

• Consumer Discretionary began underperforming vs. the index late last year. Consumer Discretionary looked like it might give up its leadership in 2014 as well, but held on. The sector is even more overextended now technically, not to mention it’s been pushing the upper boundaries valuation-wise for a while. Maybe this is the real turn.

• Consumer staples usually ramp up during tougher economic times on a relative basis, and slink-back during the good economic times. They’ve defied gravity during the post-crisis recovery, perhaps a symbol of the uninspiring global economic growth trajectory.

• IT experienced a nice relative performance run since the financial crisis. Some hits to big players like Apple in recent weeks have contributed to the downward relative performance hook, the first in nearly four years.

• Health Care had a monster relative performance run from 2008 to 2015. We identified this sector as one to watch last year for potential underperformance. Relative performance has been in a downtrend since mid to late 2015. Like Consumer Discretionary, this is a sector that’s experienced significant outperformance and that is overextended from both a valuation and a technical standpoint. We believe it will be a struggle for this sector to achieve future outperformance.

• The relative performance chart for Global financial stocks speaks for itself. It’s been a devastating two-decade period for this sector. Notice the sharp move down in relative performance recently. The historic undervaluation for a number of financial sector equities has attracted value investors at a number of points since the financial crisis. Every light at the end of the tunnel turns out to be a train.

• The energy sector is showing signs of life for the first time in at least two years. It’s been a painful decade for energy investors and traders. Relative performance has now essentially round tripped after a massive period of outperformance from 1995 to 2008. While a number of companies within the sector are facing severe financial difficulty, other companies are significantly undervalued and prepared to benefit should oil prices find a longer-term foothold at current levels.

• Overall, the Industrials sector has been a “she loves me, she loves me not” type universe since 2010. Industrials have been outperforming again of late. Will it be another short-lived run?

• Utilities stocks have shown some signs of life this year. Relative performance is close to breaking out to the upside. Is this a bad sign? Like Consumer Staples, investors usually see this sector exhibit significant outperformance when the underlying economic and market environment is deteriorating. Over the past 20 years, this narrative has held for the most part, except for the 2004 to 2006 period where global utilities stocks outperformed despite an economic expansion and equity bull run. Utilities may have been foreshadowing the troubles to come in late 2007 and 2008.

• After a long uninterrupted stretch of underperformance since the financial crisis, global Telecommunication stocks have finally started exhibiting decent outperformance. We’ll see if it holds. We’ve mentioned in the past that the price action in telecommunication stocks since the tech and telecom bubble bust in 2000 may provide a (depressing) template for financial sector investors going forward.

• For all the hype surrounding Emerging Markets equities over the past two decades, they’ve actually underperformed the overall MSCI World when all is said and done. Like the late 1990s EM swoon, the recent underperformance has been painful and humbling for EM acolytes. For the first time in a few years, EM relative strength is pushing above the moving averages. There have been false starts before. With normalized valuations having reached the high single digits at various points over the past year, we think this could represent the “beginning of the end” of underperformance.

• The poor EAFE stocks just can’t catch a bid. Underperformance since the financial crisis has been dramatic. There haven’t even been many upward head fakes along the way. At least you can say troubles in developed international equities have been consistent. The overall EAFE valuation levels aren’t nearly as washed out as EM valuations, though they are lower and more attractive than valuations for US equity indices. It’s hard to make a call that European and developed Asian equities will dramatically outperform broad global indices in coming years. However, we’d rather be in EAFE stocks over the next several years than US stocks.