Excerpt from Bloomberg quoting DataTrek’s Nick Colas:
… “While the current rally in cyclical sectors since November has a “strong whiff of a ‘dash to trash’” given the quality of the companies, the pandemic could force some profound changes on industries — especially financials and energy — that could also spur more long-term gains, according to Nicholas Colas, co-founder of DataTrek Research.
“Some cyclical industries may be so different post-pandemic that they could see multi-year outperformance,” he said.
For example, energy companies need to cut costs to address structural challenges related to carbon-based energy demand, while financials are still too tied to human infrastructure to compete with technology-based rivals, Colas said.
“There’s a lot more going on under the surface,” wrote Colas. “We still like cyclicals”….
Read the full article here on Bloomberg!