If you???ve been paying even cursory attention to the markets since Election Day, you already know that stocks here in the United States have been on a tear. All three major indices — the Dow Industrials, S&P 500 and NASDAQ Composite — have made a series of new, all-time closing highs since the election of Donald J. Trump as the 45th president.
This move reflects the renewed optimism in markets that investors have about the Trump administration and its agenda of fiscal stimulus (infrastructure spending), tax cuts, regulation rollbacks and the repeal of Obamacare.
Whether all, some or none of these things come to pass next year isn???t the issue today. Rather, the issue now is that the market is pricing in a lot of growth expectations due to the expected Trump policies, and that???s a very nice change in the orientation of markets from the state of the economy we???ve seen during the past eight years.
Now, within the domestic markets, there has been a pronounced rotation out of asset classes such as bonds and gold, and out of equity sectors like utilities, consumer staples, technology, real estate investment trusts (REITs), etc.
Where has all that money gone?
Well, it has migrated to industrials, defense, energy, basic materials and financials — all sectors that stand to benefit from the policy proposals expected by a President Trump.
Yet what about the rest of the global investing landscape? Has money been shunted out of certain global sectors and into others?
The answer is ???yes,??? somewhat. To see that rotation, all we need do is look at a few telling charts.
Here we see the benchmark measure of the U.S. market, the SPDR S&P 500 ETF (SPY), surging since Election Day. During the past four weeks, SPY is up 4.4%.
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