US markets hit new all-time highs early this year.
Economic data are positive, and, although it is in a tightening cycle, the Fed has taken on an accommodating tone. However, uncertainties continue to flow from the Trump administration, which has served notice that it will pull out of major international treaties. Meanwhile, the announcement of a travel ban on citizens from seven “Muslim” countries disrupted the markets.
- Basic materials, IT and consumer discretionary fared best.
- Consumer stocks look a little expensive right now.
- We expect earnings per share to continue to improve in the energy, basic materials, IT and financial sectors. We nonetheless took our profits on our bet on financials, which paid off very well for us. We are holding onto just a few positions in banks, which could benefit from the deregulation trend in the US.
- The reflation scenario is still being played by some market participants, but less so than last year.
- As things have not otherwise changed fundamentally, we are sticking to our positive biases in healthcare, industry and IT. Our exposure is much the same as last month.