The sharpest knife in the drawer, the cleanest shirt in the hamper; all these fun adages can be used to describe the U.S. economy relative to others around the world. The consequences of having such a relatively strong business environment is that we are attracting money and resources from the rest. The U.S. is a veritable haven with a strong currency, rule of law, liquid markets, and desirable assets.
The coronavirus outbreak in China has accelerated one trend already in place: money pouring into our assets bidding up prices. A strong dollar and lower interest rates are the evidence. Large liquid growth equities are also having large inflows. Outsiders are simply piling into those that have already been doing well. This creates momentum attracting even more interest.
The broadening of the stock market of last fall and early winter has been aborted. Performance is now coming from a narrow segment. This is not healthy but will probably not shift back until the coronavirus outbreak is seen to be under control. Warmer weather helps reduce the contagion of these pathogens; so, time is helpful. Then, hopefully a reversal of current trends will take place.
Tactically, shifting portfolios back and forth is counterproductive. Timing is tricky and trading inefficiencies and tax consequences can ruin any advantages. Slight shifts can be made, but patience is what is really needed; stay steady, my friends.
The Lonely Bull