How is the sector rotation going? One would think that with all the hype around AI, the tech sector would be leading the pack YTD, however is the Utilities sector the one that does. In fact, NVDA made an All time high on June 18th; since then, as you can see in the chart below, Real Estate, financials and Utilities are the leaders, and the Tech sector is the laggard. It seems investors are positioning their portfolios for a rate cut and they are choosing the most interest rate sensitive sectors and betting they will pull from this market, taking the baton from Tech. Do they have enough weight on the index to lead? Financials comprise 13% of the index and Real estate and Utilities, weight 5% aprox for a total of 18% vs 30% of the tech index. We’re short 40% on gunpowder.
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Chart Source: Natixis
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