While the markets are struggling, certain sectors are standing out with strong relative outperformance. In this post, I want to examine what’s going on beyond the indexes. Yes, the Nasdaq-100 is down about 10% from its most recent high and yes the S&P 500 is down 5% from its most recent high, BUT some strength is appearing out of nowhere:

Telecom & Communication Stocks Are Outperforming

Telecom giants AT&T and Verizon are significantly outperforming the key indexes:

• AT&T ($T) is up 20 percent this year
• Verizon ($VZ) is up about 10 percent

The reason for this strength can be found in the simple fact that people always need to chat, text, call friends, family, businesses, customers, and keep their lives connected. It is an essential service. For this reason, there is some safety in these stocks, added that they also pay dividends. I personally think this entire industry is wide open for additional research, where financially strong telecom and communication stocks can also join this rally despite the market downturn.

Trading and Volatility Stocks Are Booming in the Chaos

While telecom stocks are benefiting from their stability, another group of stocks is thriving due to the volatility itself—futures and options exchanges:

• CME Group ($CME) is up 10 percent this year
• CBOE ($CBOE) is up 10 percent this year

Higher market volatility leads to increased trading volume in futures and options, which directly benefits the exchanges facilitating those trades. CME Group runs futures markets while CBOE is a key player in options trading. As investors and institutions look to hedge risk or take advantage of price swings, trading-related businesses see stronger revenue growth.

There’s always a bull market somewhere. You just need to know where to look.