If there’s one truth about the markets these days, it’s that the cyclicals are back with a vengeance.
Since Trump’s election win a year ago, stocks tied to the health of the economy have started cooking. That’s been great news for the major industrial and manufacturing firms. Many have seen their share prices rise on the promises of higher global growth and demand.
But more could be on the horizon.
Investors have continued to bet heavily on the sector, including some record inflows in industrial funds. That current momentum plus several other structural factors could have the sector continuing their gains and dividend growth in the upcoming year. For investors, there’s still time to bet on the industrials for the next leg up.
Record Inflows
Like him or hate him, the election of Donald Trump was a game changer, at least when it comes to expectations of economic growth. Thanks to his low tax, pro-business policies, Trump has boosted expectations for GDP expansion in the U.S. That’s flipped the script on the previous market leaders and placed major manufacturing stocks into the pole position. Gains for the industrials segment have been pretty swift since Trump has taken office.
