Massive Reallocation From Bonds Into Is Coming: Deutsche Bank

Despite the market witnessing record inflows into equities last week after the U.S. elections, there is a massive potential for reallocations out of bonds and into equities, believe Deutsche Bank analysts. Parag Thatte and colleagues said in their November 18 research piece titled “Large Post Election Moves: What To Fade And What To Buy Into?” that they believe Consumer Discretionary is the cheapest sector in the S&P 500 now.

Rotation from bonds into equities should continue

Thatte and team point out that the U.S. equity market rally that typically occurs after a close election hasn’t yet happened, with the market so far just catching back up to pre-election levels.

The DB analysts...