Some market gurus are starting to worry the summer rally on Wall Street may be starting to fizzle, after stocks quickly lurched from oversold to overbought. Gene Goldman, chief investment officer of Cetera Financial Group, explained that stocks are likely headed for a pullback, even though the economy is in better shape than many Americans realize.
“There’s been plenty of great news but the market needs a little bit of a pause. We’ve moved a little too fast, too quickly right now,” Goldman said in a phone call with MarketWatch. To support this view, he pointed to a handful of reasons why Friday’s slump in stocks might continue into next week, and possibly longer — even though he remains bullish on stocks over a longer time horizon. Defensive sectors back in vogue Cyclical sectors outperformed as stocks rallied in July and early August. But that trend appeared to come to an end this week, as defensive sectors retook the lead. “One sign that investors are getting nervous is cyclicals underperforming defensive sectors, and we’re starting to see that now,” Goldman said. Over the past week, consumer staples stocks and utilities were two top performers among the S&P 500’s 11 sectors. As a result, the Consumer Staples Select Sector SPDR fu …