Can value, inflation & defensive related stocks take the lead post US Presidential Election?
An interesting development has started to take shape under the hood and the main trigger/driver seems to be the rate of change of the UST 10-year yield.
1. From 03 Sep to 05 Oct, the rate of change for UST 10-year yield has inched higher and turned positive while growth & higher beta sectors/stocks; FAANG + Microsoft, Technology, Communication Services have started to see their cumulative returns declined except for Biotechnology.
2. In contrast, value oriented sectors; Materials & Industrials as well as defensive Utilities accumulative returns have improved.
Overall such sector rotation (leadership from value, inflation & defensive) may indicate that we are in the late stage of the secular bullish phase for US equities in place since Mar 2009
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