After a summer filled with uncertainty due to a surge in the COVID Delta Variant, data shows that cases are dropping, and it appears that confidence in the economic recovery is rising again. As the short-term distraction of COVID fades from view, we believe investors are shifting their focus toward stock market leadership and which sectors and themes are poised to accelerate in Q4. In this week’s update, we will review the impact of an economic reacceleration and rising interest rates on stocks and what it means for sector and investment style leadership moving forward.
- Market leadership is shifting away from technology and toward energy and banks
- Expecting a fourth-quarter economic recovery to push interest rates higher → good for bank stocks
- Oil supplies continue to tighten → Positive for energy stocks
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