Founder’s Note: Grant Hawkridge is as American as any Aussie can be.
We have a long, complex, and enduring relationship with our friends Down Under. And Grant really gets it.
Here he is with what America means to an Australian… – JC
By Grant Hawkridge
G’day, Grant here again.
With the Fourth of July this weekend, I’ve been thinking about my trips to the United States over the years, and every visit reminds me why I enjoy going back.
Americans are some of the friendliest people you’ll ever meet. The national parks are breathtaking. Live sport feels more like a festival than a game.
And nobody celebrates a holiday quite like the Fourth of July.
Give Americans a barbecue, a few hot dogs and enough fireworks to light up half the county, and they’re in their happy place.
From Down Under, it’s hard not to admire that enthusiasm.
There’s just one problem.
The coffee.
Australians have become unapologetic coffee snobs. If a café serves bad coffee back home, chances are it won’t be around for long. The competition is simply too fierce.
That obsession even shows up in the numbers. Seven Australian cafés made the 2026 World’s 100 Best Coffee Shops list, with two finishing inside the world’s top five.
We had more cafés in the Top 100 than Brazil and Colombia combined, despite producing virtually no commercial coffee of our own.
Australia isn’t famous for growing coffee.
We’re famous for refusing to drink bad coffee.
Even Starbucks (SBUX) found that out the hard way. When it first expanded into Australia, the formula that worked almost everywhere else in the world didn’t work here. Australians weren’t rejecting coffee.
They were rejecting average coffee.
Starbucks learnt that lesson the hard way. After expanding aggressively across Australia, it ended up closing around 80% of its stores.
It didn’t disappear, though.
It slowed down, adapted its strategy and found a model that worked.
America Never Stands Still
There’s a reason I’ve always enjoyed visiting America.
It’s not because everything is bigger. Although it usually is.
It’s because America has always rewarded change.
Every generation has produced new industries, new companies and new leaders. Yesterday’s giants step aside and tomorrow’s innovators take their place.
The stock market works exactly the same way.
Every healthy bull market changes as it matures. Leadership rotates. Money moves. New opportunities emerge.
That’s exactly what I’ve been seeing beneath the surface over the past few months.
While the headlines have focused on AI, I’ve been watching where the money has been flowing next.
The Bull Market Is Finding New Leaders
If you’ve only been watching the headlines, you’d be forgiven for thinking this has been an AI bull market.
That’s only half the story.
Every healthy bull market changes as it matures. They usually begin with a handful of sectors attracting most of the money.
Those early leaders grab the headlines, outperform everything else and quickly become the market’s favourite trade.
That’s exactly what we’ve seen since the April lows:
Technology has been carrying the market.
Since late April, The Machines (XLK) has been the only sector in our Sector Rotation Engine carrying a Strong rotation signal.
XLK has combined a rising price trend with improving relative strength, making it the clear leadership group throughout the recovery.
Almost every conversation has centred around AI, semiconductors, and the Magnificent 7.
The market has rewarded that positioning:
Technology didn’t simply bounce with the market. It broke out of a multi-month base relative to the S&P 500 and has continued making higher highs and higher lows.
When a relative strength chart is moving up and to the right, it tells us investors continue allocating more money to that sector than the broader market.
That’s exactly what we’ve been seeing for the past two months.
But here’s where the story gets more interesting.
Healthy bull markets don’t rely on one sector forever.
As the original leaders become extended, money naturally begins looking for the next opportunity. New sectors start improving, relative strength begins to turn higher and leadership gradually starts to broaden.
That’s where the market sits today.
Industrials have now joined Technology as one of the strongest areas of the market:
For almost two years, Industrials repeatedly ran into resistance whenever they tried to outperform the broader market. Every attempt stalled before meaningful leadership could develop.
That’s changed.
The recent breakout completes a large base-on-base continuation pattern and has begun to push relative strength higher.
More importantly, it confirms that leadership is no longer confined to Technology alone.
That’s exactly what we want to see during a healthy bull market.
Healthcare isn’t a leader yet.
But it’s earning the right to stay on the watchlist:
Unlike Technology and Industrials, Healthcare has spent much of the past year lagging the broader market.
That’s beginning to change.
The recent reversal from a failed breakdown has pushed relative strength back above an important support zone and is one of the first signs that investors may be starting to accumulate the sector again.
That’s why Healthcare currently carries a Neutral rotation signal rather than a Weak one.
Stepping back, that’s the bigger message behind all three charts.
Technology hasn’t stopped leading.
It has simply stopped leading alone.
Industrials are now confirming the move. Healthcare is beginning to improve. Financials, Consumer Discretionary, Real Estate and Utilities are also starting to show early signs of attracting money.
Money isn’t leaving the market.
It’s spreading through it.
A bull market carried by one sector can keep going for a while.
A bull market supported by several sectors is usually much harder to stop.
That’s exactly what healthy bull markets are supposed to do.
More Leaders, More Opportunities
That’s why we’re spending less time trying to predict which sector will lead next and more time following the evidence.
Technology continues to deserve its place at the top of the leaderboard. But for the first time in months, it isn’t standing there on its own.
Industrials have stepped into a leadership role, Healthcare is beginning to improve, and several other sectors are starting to earn our attention.
The opportunity set is becoming broader, and that’s exactly what we’d expect to see as a healthy bull market matures.
We’ll keep following the evidence and let the market tell us where leadership is developing next.
For now, though, it’s time to switch the screens off for a couple of days.
If you’re celebrating the Fourth of July this weekend, I hope you enjoy the time with family and friends, fire up the barbecue, watch the fireworks and take a well-earned break from the markets.
And if you’re reading this from somewhere else in the world, I hope you find your own way to recharge before Monday rolls around.
The market will still be here next week.
Hopefully, with a few more sectors stepping into leadership.
Have a great weekend.
Happy hitting🏌️⛳
Grant Hawkridge
Quantitative Analyst, TrendLabs