(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are looking to take profits in the rally for cyclicals and small caps and looking to play the expected capex boom following the passing of President Donald Trump’s tax and spending bill. Investing in tech infrastructure Chris Hyzy, chief investment officer of Bank of America Private Bank, sees large tech companies spending on capital expenditures increasing and boosting demand for what he calls “power infrastructure” after the signing of the tax bill. “We think we are on the verge of one of the greatest capex booms we’ve ever had,” Hyzy said. “Robotics, Automation, Generative Artificial Intelligence, data center buildouts, all of that is starting to begin to accelerate.” Hyzy did not provide picks, but there are several ETFs that give investors broad exposure to areas he expects to benefit including: robotics, automation, cybersecurity and data centers. Outlook for cyclicals Callie Cox of Ritholtz sees an inflection point for cyclical sectors, including industrials and financials, and the interest rate sensitive small caps in the second half of the year. “I think protection is really important to focus on with the economy clearly slowing down,” said Cox. “We’re not in a position where we can say that any rates cuts we get will be ‘celebratory’ rate cuts. I would edge out of cyclicals here just to prepare for where the economy really is.” Industrials are the leading sector year to date with a more than 12% gain. Financials have gained more than 8%, and the Russell 2000 is essentially flat year to date. Reading the signals from the bond and currency markets Amanda Agati of PNC said the 30-year Treasury bond yield hitting its highest level since 2007 and the dollar having its worst half of a year in more than 50 years could be a major headwind for the market moving higher. “I think it’s a really helpful and important signal for all investors,” Agati said. “The bond market is the ‘adult in the room’, saying ‘Houston we have a problem’, as it relates to deficits and debt levels. Of course, we had this big package come through, the question is how are we going to pay for it.” She added: “It’s more of a bearish view, we are seeing a steepening of the yield curve that tends to be historically positive as a leading indicator of growth, but this time around given some of the dynamics … it’s actually foretelling a more bearish story.”
