Positioning A Portfolio For A Trump Presidency

The market is celebrating the prospect of deregulation, lower taxes, and Fed rate cuts, for now ignoring the dangers of wider budget deficits, inflationary pressures, and trade wars. The rally can continue into the year-end and reduced uncertainty, seasonality, and positive momentum will benefit recent laggards such as Small, Value, and Cyclicals. We downgrade Energy from overweight to underweight. We downgrade Telecoms and Consumer Staples to underweight. We upgrade Insurance from underweight to overweight. We upgrade Utilities to overweight.