Yesterday there was more evidence of big tech’s fading importance: massive rallies in chemical stocks, industrial metals and construction firms.
The Dow Jones Heavy Construction Index ($DJUSHV) jumped 8.3 percent on Wednesday. It outpaced the S&P 500 by 7.8 percentage points, the biggest one-day outperformance in over four years. Chemicals and metals also jumped, but less dramatically.
Meanwhile, the Nasdaq-100 fell almost 2 percent relative to the S&P 500. That was its worst one-day relative strength since Pfizer’s (PFE) vaccine announcement lifted launched a rally on November 9.
Investors are hoping for more stimulus from the new Congress, plus some kind of infrastructure package. Combined with the recoveries in Asia, it’s another sign of sentiment shifting toward cyclical value socks and away from big tech stocks.
This also points to faster inflation and higher interest rates. The coming months could be very different from market conditions we’ve seen most of the last decade.
