There was some rotation out of bonds and into stocks since the election and there has been some rotation within the stock market itself. As you would expect the high yield investments (REITs, utilities, consumer staples) have all underperformed as long bond rates have spiked higher. The bond market lost more than $1T (yes, that is one trillion dollars) last week.
It appears as if money managers and investors are setting up for what they believe will be the new winners once Trump takes office. Materials and other inflation/growth vehicles were on an abbreviated week tear. Technology, the past 7 year darling could get out if its own way as it was lower in spite of the post-election rally. The broader stock market shifted into a lower gear for the time being, having lost the support of its most influential sector and most of the influential momentum stocks.
Things are a changin’
Here’s what I want you to take away from the week that was. In fact, if you remember nothing else, remember this: Markets stall or sell off on uncertainty and they rally hard on certainty. Markets like answers. They don’t like President Trump any more or less than they like President Clinton. They will adapt. Will you?