The election of Donald Trump to US President was a boon to the financial markets, but that may soon change, according to analysts keeping close tabs on the latest market rally.

Since November 8, the Trump rally has consisted of surging stocks, higher yields and a stronger US dollar – all on expectations of faster economic growth under the incoming Republican administration. But as the January 20 inauguration looms, the market uptrend appears to have lost momentum, as investors begin searching for tangible clues about Trump’s first 100 days in office.

Markets were left disappointed following Trump’s first news conference since being elected. The President-elect failed to elaborate on his policies or provide any indication of what his priorities will be. Instead, he used the event to lash out against fake news and go after the pharmaceutical industry for price gouging.

Trump’s inauguration, which is set to take place on January 20, may be a classic “buy the rumour, sell the fact” event for the financial markets. This is in stark contrast to the post-election rally, which was a “buy it now, prove it to me later” market.^[1]

While it’s difficult to predict exactly how investors will respond to inauguration day, US stocks may be overvalued since the latest rally had very little to do with market fundamentals. In fact, the broader outlook hasn’t changed much since the November 8 election. Following inauguration, the path of least resistance may be lower – that is, unless the new administration may outline a clear strategy for achieving the growth it has long promised.

The CBOE VIX, a measure of implied volatility in S&P 500 Index options, is trading well below the historic average. Any sign of “buy the rumour, sell the fact” mentality in the market this week may be reflected in the VIX almost immediately. The so-called “fear index” trades on a scale of 1-100, where 20 represents the historical average.

Financial stocks may be among the hardest hit should the post-election rally fade after inauguration day. The S&P 500’s financial index has surged nearly 18% since the election on the prospect of deregulation, faster growth and higher US interest rates.

Telecommunications stocks have advanced more than 11% since November 8, while gains in energy have amounted to roughly 7%.^[2] These sectors may are most vulnerable to a potential pullback may investors decide they are no longer convinced with the economy’s growth potential under Trump.

A selloff in equities will may feed into precious metals, which are enjoying a three-week uptrend at the start of the year. Gold prices hit $1,200 a troy ounce on Monday for the first time since November.  Demand for so-called haven assets may be on the rise if equities tumble.

Gold futures are up more than 6% from their mid-December lows. Gains for silver futures have been equally robust since the new year.

The response of the US dollar to inauguration day may also be telling. The greenback surged to 14-year highs following Trump’s victory on expectations high-growth policies may trigger higher inflation, leading the Federal Reserve to tighten monetary policy at a faster pace. Trump’s plan included a trillion-dollar infrastructure program, massive corporate and personal tax cuts and deregulation of key industries.

The Federal Reserve is carefully monitoring inflation expectations. Policymakers raised interest rates in December for the first time in a year and said they expect to tighten monetary policy three times in 2017.^[3]

While many experts forecast a potential correction after Friday’s inauguration, they differ on how bad it may be. The good news is Trump has promised to waste no time executing on his plan.^[4] That may mean investors won’t have to speculate for long about how the new administration will follow through on its promises.

^[1] Bryan Rich (January 11, 2017). “Will The Trump Inauguration Be A ‘Buy The Rumor Sell The Fact’ Event?” Forbes.

^[2] Kim Iskyan (January 12, 2017). “The ‘Trump Rally’ in Stocks Is Ending – Here’s How You Can Profit.” The Street.

^[3] Gregg Robb (December 14, 2016). “Fed Raises Interest Rates and Adds Another Hike to it 2017 Forecast.” Market Watch.

^[4] Bryan Rich (January 11, 2017). “Will The Trump Inauguration Be A ‘Buy The Rumor Sell The Fact’ Event?” Forbes.