Published December 30, 2016
Over the course of 2016 stock investors saw a dramatic shift in market leadership. As interest rates fell back in the first half of the year, so-called low volatility sectors led the market. These sectors tend to focus on higher dividends thus are beneficiaries of lower interest rate expectations. As markets entered the final quarter of the year and the Fed’s expected December interest rate hike became more of a certainty, leadership shifted toward sectors that are more cyclical along with those that benefit from a rising rate environment. This trend accelerated substantially after the election. (more…)