A tectonic shift for investors

IETF Focus n the aftermath of last week’s momentous U.S. election results, investment professionals and investors alike are dealing with some significant changes to the economic landscape.

The U.S. Federal Reserve, for example, looks poised to raise rates by a quarter point next month, while 2017 could now bring more hikes than had been assumed.

On the sector front, cement and copper appear to be major winners from Trump’s push to make America’s infrastructure great again; banks and financials are off the regulatory hook; and the “watch out, here comes Hillary” weight that has been hanging over health-care stocks has lifted.

Emerging markets are also likely to remain under pressure from the dual threat of a rising U.S. dollar and anticipation of an upcoming wave of protectionism.

Whether all these come to pass remains to be seen. As someone aptly put it: “Will Trump the movie prove a vastly different one than the trailer?” One can only hope.

One undeniable fact remains. The environment has changed, the tectonic plates have shifted, with further aftershocks to be expected. How you position, anticipate or react to these, as shown in some of the recent relative performance extremes, will present opportunities and new risks.

Going forward, if I had one bet to make it would be that we will see renewed volatility ahead of the January inauguration on any policy-related news or controversial appointments.

It is also reasonable to expect that — based on the $1 trillion-plus in losses in the bond market — we may have heard the last of negative interest-rate debt.