Although technology stocks have recently taken the lead again after prices recovered from the crisis on August 5, the information technology sector is still more than 3 percent below its last record high in the S&P 500. Utilities stocks have now risen by almost 7 percent.

When defensive stocks start to outperform, investors often get nervous. After all, these companies have a reputation for leading the market in recessions. However, they usually fare less badly than everyone else in such cases.

So are these stocks trying to tell investors something about the direction the economy might take? Colas doesn’t think so.

“We have read bearish market commentary that sees the recent outperformance of utilities and consumer staples, both defensive groups, as a sign that markets are increasingly worried about a recession. We think this is a fundamental misreading of the situation,” he said in a report provided to MarketWatch on Tuesday.

Instead, there’s a more compelling explanation for why these stocks have performed so well recently. And it has less to do with expectations for the economy and more to do with the outlook for monetary policy. When interest rates fall, interest rate-sensitive stocks, especially those with high dividends like many of these defensive stocks, tend to perform better.

In the past, the Fed has cut interest rates during times when the economy was facing challenges, but that may not be the case this time. Moreover, if investors were truly afraid of a recession, they would not be buying real estate and financial stocks, Colas says.

“Another reason to view recent market developments as optimistic is that real estate and financials are performing significantly better,” he said.