Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hello Team, We have seen energy picking up in early 2022 and being abandoned by mid 2022. Tech who was abandoned in early 2022 now finding some friends, we have seen something similar between consumer staples and discretionary. What is MMs view/thoughts on what kind of sector rotation we are likely to see in next few quarters and 2023?
Hi Nilang,
Our view around sectors is largely determined by bond yields which we believe will take another look on the upside and potentially in a number of cases make new highs multi-year. However this is not a move we’re looking to position for as opposed to using it to tweak portfolios towards lower bond yields into such a move i.e. we are looking to ultimately position ourselves for an extension of stock / sector rotation similar to how markets have performed since mid-June.
If bond yields continue to edge higher in the following weeks we expect interest rate sensitive stocks / sectors to struggle as they have been as we approach Jackson Hole:
MM is looking to fade such a move if it unfolds by increasing our exposure towards these sectors into weakness over the coming weeks / months.
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