Which sectors suffered last week?

Last week’s U.S. election results weighed heavily on dividend stocks and interest rate-sensitive sectors, which underperformed significantly, says Prab Sagoo, associate director at Nasdaq Advisory Services, in his weekly commentary.

Since market close on November 8th, he says, “REITs, telcos and utilities [have] lost an average of 3.8%, with utilities the largest underperformer of the three.” And, “losses were not contained [there]. The safe materials sector lost […] during the week as investors quickly moved to a risk-on mindset.” Consumer staples also lost.

Read:

• Portfolio managers hold fire on Trump trades
• Nervous about Trump? Here’s what to watch

These areas of the market suffered mainly because president-elect Donald Trump’s win “did little to dim the market’s view that a Federal Reserve rate hike is on the horizon at the December meeting. And, if pre-election pledges hold, the higher spending environment will raise inflationary pressures.”

Read: December Fed hike still a “strong” possibility

Additional findings

• The TSX ended last week marginally higher on heavy volumes, underperforming most other global benchmarks following the victory by Trump.
• Following a slight risk-off mindset early on November 9, traders viewed the election result as bullish given Trump’s pre-election pledges of lower taxes and sizeable infrastructure spending. This led to U.S. treasury yields rising across the curve, with Canadian government yields following suit as the curve steepened. Read: Potential inflation jump under Trump spells bad news for bonds
• Financials were one of the primary beneficiaries of a possible higher rate environment (+4%), while industrials outperformed all, with gains of 4%.
• The loonie weakened versus the U.S. dollar, while pro-growth copper shot higher (+19%).
• Canada’s calendar is light this week, with manufacturing and CPI data headlining.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.