This is important because the latest data is current through Tuesday which means it captures the aftermath of the Fed’s “dovish” hike that sent yields plunging or, more to the point, moved markets against the (very) crowded short Treasury trade.
“Investors have also reduced expectations for the timing and size of tax reform. After outperforming the S&P 500 by 520 bp post-election, our basket of stocks with the highest effective tax rates has given back all of its post-election gains in the last three months.”
Ultimately, what the media prints and, in turn, what people read shapes investor psychology. It’s probably fair to say that plastering “Dow Hits 20,000” all over the front pages of national newspapers helped accelerate inflows into popular retail equity vehicles like SPY earlier this year.
“Since the early days of his campaign, the president has developed a pattern: Make an outrageous claim. Dig in as the criticism rolls. And wait until, eventually, something emerges that can be spun as vindication of the earlier claim.”
Somehow I doubt this will come as a surprise to anyone, but investors yanked the most money from bank sector funds in more than year over the last week, as the Fed’s “dovish” hike exacerbated fears that popular Trump trades may have run their course.