Utilities and Health Care. These are the top two sectors in the S&P 500 this year, which may come as a surprise to many as we’re being told that economic growth is set to accelerate. Given this defensive leadership, one would assume the financial markets and economy would be having a more difficult year in 2014.

As illustrated by the highlighted years in the table below, this was the case in the past when defensive sectors (Utilities, Staples, or Health Care) occupied the top two spots.

First, in 1990, we saw Health Care and Consumer Staples in the top two spots. The U.S. economy slipped into recession in July of that year which would last until March of 1991. We also saw a greater than 20% decline in the S&P 500 from July through October in 1990.

Next, in 2000, we saw Utilities and Health Care in the top two spots. The equity market would peak in March of 2000 and the economy would slip into recession the following year, in March of 2001.

Next, in 2008, we saw Consumer Staples and Health Care leading. The economy was in recession from the start of the year and the S&P 500 suffered its worst decline since the Great Depression.

Lastly, in 2011 we saw Utilities and Consumer Staples leading. The S&P 500 would suffer a decline during the year of over 20% before finishing the year flat. While leading indicators plummeted and growth slowed, the economy managed to avert a recession.

Which brings us back to 2014, where Utilities and Health Care stocks have been leading for the entire year. Meanwhile large-cap indices are still hitting new all-time highs, leading many to conclude that defensive market behavior no longer matters under the global coordinated monetary easing regime.

Perhaps, but I would note that the average stock has not ignored this defensive behavior, with the Russell 2000 roughly flat on the year while Utilities and Health Care are up well over 20%.

I would also note that bond market participants are not ignoring this defensive leadership, with the yield curve (10-year minus 2-year) flattening for the entire year.

High Yield investors seem to be paying attention as well, with credit spreads wider on the year and higher than levels from a year ago.

What does this mean for markets going forward? As I wrote recently, strong momentum and seasonality are likely to support the equity market into year-end and at the very least prevent a large decline. But as we head into 2015, this is going to be the key question for investors: is defensive sector behavior signaling slower growth to come? It is hard to argue otherwise given the historical evidence and the confirming behavior in the Treasury and high yield credit markets.

But even if we accept that a slowdown is coming, the more difficult question still remains: will it matter in a market that has become more and more fixated on central bank easy money policy? No one can answer that question but what we can say is that most are assuming it will not matter, as reflected by the extreme love for equities in recent sentiment polls. We’ll find out in 2015 if this is the correct assumption.