On May 26th, we adopted an offensive position due to (1) the continued improvement in our key credit metrics, (2) rotation into the areas that benefit from an economic reopening, and (3) the S&P 500 (SPX) breakout from the trading range that began following the initial relief rally off the panic low. The stronger than expected Payroll report reinforces our move to offense focused in the “economic reopening” trade. The sectors that have led the move higher since the breakout have seen an incredible moves:
- KBW Bank Stock Index (BKX) is up 30%
- S&P Industrial Sector (Tanks) is up 18%
- Equal weighted Consumer Discretion that takes out Amazon effect is up 20%
- Russell 1000 Value (RLV) is up 12%
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