After the US election, the market experienced a notable rise in financials, industrials, and other cyclical stocks, as the results had not been fully anticipated. This opens up potential for quality cyclicals to benefit from deregulation and tax changes. However, there are still risks to consider, such as increasing interest rates, a stronger dollar affecting multinational companies, and a gap between current stock prices and their actual fundamentals. Unlike in 2016, small-cap and lower-quality stocks may not perform as well this time, given their vulnerability to rising interest rates and the trend of negative earnings revisions.
