With the calendar entering the back half of Q3 2025 and earnings beginning to wind down, it is worth taking time to note what changes in relative strength have transpired within the NDW DALI asset and sub-asset class rankings.
With the calendar entering the back half of Q3 2025 and earnings beginning to wind down, it is worth taking time to note what changes in relative strength have transpired within the NDW DALI asset and sub-asset class rankings.
Within the broad DALI asset class rankings, domestic equities have picked up 20 tally (or buy) signals in Q3. This extends the lead for U.S. equities to 18 tally signals after overtaking International Equities for the top spot to cap off Q2. U.S. equities have now spent 80% of 2025 ranked as the top asset class within the NDW DALI asset class rankings. Since the beginning of Q3, international equities is the only other asset class besides domestic to see an increase in tally signal count. After jockeying with the top two asset classes for much of Q2, commodities have shed nine tally signals in Q3, residing 19 tally signals behind International. Defensive asset classes like cash, currencies, and fixed income have all seen their tally signal counts decrease since early April. DALI has now favored an offensive posture with both equity asset classes and commodities ranking within the top half (out of six asset classes) since May 2023.
The remainder of the piece will look to highlight developments worth monitoring within U.S. Equity sectors. Large caps and growth continue to maintain a notable lead over their mid-cap, small-cap. blend and value counterparts. European equities and global developed markets sustain high relative strength. For a recent update on International Equities check out the Daily Equity Report from August 18th. Currency and fixed income rankings have remained unchanged following changes in the latter part of April and early May, which brought developed currencies above the U.S. Dollar and risk-on fixed income back to the top of the asset class’s ranking.
From an improving leadership perspective within U.S. equities, technology has garnered the most attention, grabbing 20 tally signals since the beginning of Q3 and moving to 3rd within the NDW DALI sector rankings. Although its ranking among the sectors remains the same, basic materials have increased 21 tally signals to be the most improved sector from a relative strength basis in Q3. Basic materials have ranked within the bottom half of the DALI sector rankings since December 2023, but prior to moving into the bottom half, the sector ranked among the top 5 for 13 months, from November 2022 to December 2023. Beyond the two aforementioned sectors, only two others – consumer cyclical (+12) and energy (+9) – have seen improving tally signal counts in Q3.
Healthcare, which already ranks as the 11th sector, has seen the largest decrease in tally signal count for the quarter so far with 13. Like healthcare, real estate and consumer non-cyclical have witnessed similar tally signal deterioration since April, keeping the sectors in the bottom half of the NDW DALI sector rankings. Two sectors worth monitoring closely for further tally signal deterioration as the third quarter moves toward a close are financials and utilities. Both currently rank within the top half of the DALI sector rankings, but recent tally signal decreases have brought both within proximity to technology (in 3rd) and basic materials (in 6th). Although technology briefly fell out of the top half of the DALI sector rankings in April this year, the top four have remained in their leadership positions for more than 12 months.
For further updates on changes to NDW DALI asset and sub-asset class rankings check out the Index and DALI Overview Video, published each Wednesday.
