The US stock market is experiencing internal rotations, with a shift towards more cyclical sectors like Energy and Materials. This comes as a departure from the Tech/Growth areas that have been favored in the past year. Despite the high risk nature of the market, it is important to pay attention to these internal rotations and make informed decisions on which sectors to invest in.
According to sector breakdown data from SPDRs, Technology has been fading in leadership while Energy and Materials are showing promise. The government’s role in the market, especially leading up to the presidential election, is also a factor to consider. With the Fed remaining tight on the Funds Rate and the Biden administration holding stimulative cards, the market could see further fluctuations.
While the Semiconductor sector remains a wildcard, sectors like Energy, Materials, and Industrials are expected to respond positively to fiscal stimulation and inflationary market signals. As we anticipate a market correction before the election, it is crucial to analyze the macro environment and determine which sectors are likely to perform well in the coming months.
Overall, it is important to stay informed and make strategic investment decisions based on the current market trends. As always, it is recommended to consult with a financial advisor before making any investment decisions.
