With tech in the dumps and economic data cooling, investors may be turning to some very different parts of the market.
Gold miners and housing stocks have outperformed of late despite being some of the worst performers most of the year. Recent economic reports may also nudge sentiment in their favor.
The Philadelphia Housing Index ($HGX), for example, rose more than 3 percent in the last month and is trying to bounce around its old highs from 2016. The prospect of higher interest rates killing home sales has weighed on this sector pretty much all year.
But markets have started to think borrowing costs may stabilize. That’s especially relevant after bigwigs at the Federal Reserve made potentially “dovish” comments and data like durable-goods orders and jobless claims missed estimates. Click here for more on Jerome Powell’s big appearance next week.
Gold also tends to benefit from lower rates. (Lower rates hurt the dollar, which helps commodities priced in greenbacks.) Maybe that’s why the NYSE Arca Gold Miners Index ($GDM) is up 6 percent in the last week.
In conclusion, money has shifted dramatically across the market in the last two months as investors dump old leaders in the technology space. Meanwhile, there are early indications of them potentially returning to some areas they avoided for most of 2018.