Naturally, there were also plenty of names that fell on the wrong side of sentiment. The prospect of protectionist trade policies, and a wall separating Mexico and North America, punished multinational companies reliant on global trade, specifically those operating just south of the border.
Those falling foul of Mr Trump’s indifference to global warming concerns, such as renewable energy firms, similarly got hammered.
Interest rates predicted to soar
The debate about interest rates also played a telling role in deciding which asset classes look set to prosper under Mr Trump.
While opinions vary, most economists reckon greater government spending will bring about a faster than expected hike to the Federal Reserve’s bank rate.
Mr Trump’s earlier criticism that keeping interest rates pegged close to 0 per cent created a “false economy” certainly got tongues wagging.
Yet what’s really driving this sentiment is the belief that his goal to ease back on austerity can finally propel the US back to prosperity. After years of waiting for the right opportunity, many believe that the Fed will now view the threat of another recession as minimal.
Ken Taube, chief investment office at Pioneer Investments, agrees that Mr Trump’s early pledges should boost corporate earnings and the economy – and subsequently force the central bank to rethink its strategy on low rates.
While this might represent good news for financial stocks, he warns that telecommunications, utilities, and bonds could suffer.
Inflation prospects bad for bonds
When interest rates increase the cost of borrowing rises, forcing consumers to save and inflation to drop.
However, the huge tax cuts, new barriers to imports and vast deficit-funded infrastructure investment proposed by Mr Trump are expected to add a twist to this tale, heralding a surge in spending and higher costs for goods.
That type of inflationary environment doesn’t bode well for government bonds, as it effectively erodes the value of interest payments. Investors didn’t waste any time acting on these signs. Since Mr Trump’s election triumph, treasury yields have risen alarmingly fast.
“We have talked about the rotation from monetary policy to fiscal policy in the US as a way to get growth going and I think this is what you will see with the Trump strategy,” says Jim Cielinski, global head of fixed income at Columbia Threadneedle Investments.
“You are talking about a very big tax cut; you’re talking about spending increases – these are inflationary and… should drive yields higher over the medium term.”
Are we getting too far ahead of ourselves?
The rapid outflows from bonds into equities over the past week shows just how much markets feed off speculation.
