Tech is no longer the primary driver of stock market momentum. Instead, that’s financials. Wolfe Research strategist Rob Ginsberg pointed out that financials now make up more than 25% of the iShares MSCI USA Momentum Factor ETF (MTUM) , while tech’s weighting has pulled back to about 20%. “Instead of Tech names driving the momentum factor higher it’s now Financials,” he wrote. “All areas of the sector are working, though Capital Market names soundly lead the pack.” Indeed, the Financials Select Sector SPDR Fund (XLF) has soared more than 22% over the past six months, while the Technology Select Sector SPDR Fund (XLK) is up 12.2% in that time. The XLF is also outperforming the XLK in the fourth quarter, gaining 11.3% versus the latter’s 4.9% advance. Tech’s dethronement as the top momentum sector comes as investors bet the incoming Trump administration will ease regulation, thus facilitating dealmaking activity. Expectations of lower taxes have also boosted financials. To be sure, Ginsberg noted that a meaningful decline in Treasury yields could hurt financial stocks, particularly regional banks. The benchmark 10-year Treasury note yield has fallen more than 15 basis points since mid-November. “Should the long end continue to fall, and we reinvert for a period of time, do banks flinch? It’s something to watch,” he said. Elsewhere Wednesday morning on Wall Street, Bank of America hiked its price target on Salesforce to $440 from $390, implying more than 30% upside following the release of the software giant’s third-quarter results . “Q3 results suggest that the company is leading the way in agentic AI cycle with Agentforce,” wrote analyst Brad Sills. “Commentary on pipeline suggests meaningful customer interest in the weeks following October release. Also, this emerging product cycle is not derailing margin expansion, with a net 10 bps raise for FY25.”
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