What the Market Thinks the Next Major Move Will Be
Leadership has changed in the markets.
Since the March lows, tech, specifically cloud-based tech, has led the markets higher. Companies like Square (SQ) have more than tripled in share price while the S&P 500 is up 40%.
However, in the last few weeks this has changed. Former market leaders like SQ or Shopify (SHOP) have been trading sideways.
Meanwhile, industrial plays like Freeport McMoran (FCX) and John Deere (DE) have barely corrected at all, soaring to new highs.
Why is this?
The market is sensing that the next major move will be driven by fiscal spending and the Trump administration’s coming infrastructure program.
Put another way, the COVID-19 lockdowns are ending, the rush into cloud/remote working plays is ending, and the next major market move will be driven by government spending.
Editor, Money & Crisis