Markets seeing broad based rally in U.S. and abroad, says Truist's Keith Lerner
Speakers
Keith Lerner
— Chief Investment Officer, Truist Wealth
Summary
Keith Lerner of Truist Advisory Services said the equity market is experiencing a broad-based rally both in the U.S. and abroad. He pointed to strength in industrials, small caps, energy, and materials alongside continued overweight positions in technology and communication services. He also noted global breadth with all tracked countries above their 200-day moving averages and described sentiment as optimistic but not euphoric.
- Keith Lerner described a broadening equity rally beyond prior tech leadership.
- Industrials and small caps were up 7% year-to-date while tech was flat.
- Truist added industrials and upgraded energy and materials in December.
- Lerner said Truist remains overweight tech and communication services.
- He cited all 40-plus countries tracked as above their 200-day moving averages.
- Sentiment was characterized as somewhat optimistic but not euphoric.
- The transcript was truncated during a discussion of staples after a sharp rally.
Ideas
Broadening equity rally has more to go
Lerner sees a broad-based equity rally and expects the near-term broadening theme to continue. Industrials and small caps are up 7% year-to-date while tech is flat, staples are participating despite not normally benefiting from an economic uptick, and optimism about an economic uptick plus January mean reversion are driving rotation beyond leadership. He also notes they added industrials and upgraded energy and materials in December as part of this broadening exposure.
Global bull market breadth is strong
All 40-plus countries Truist tracks are above their 200-day moving averages, which Lerner cites as evidence of a globally synchronous bull market and broad international breadth. This supports exposure to global equities, not just U.S. markets.
Stay overweight tech and communication services
Truist remains overweight tech and communication services as legacy positions. Lerner is positive on tech long term because earnings momentum remains positive and it is hard to be negative on tech, even if it does not immediately reassert leadership; he still wants exposure to both while the broadening theme plays out.
