The resurgence of "Trump Trades" is gaining momentum as markets react to a combination of better-than-expected economic data and dovish comments from the Federal Reserve. Investor sentiment has been buoyed by expectations of a strong earnings season for regional banks, which are heavily represented in the Russell 2000, and positive ISM and Philly Fed PMI data. This has led to a rally in small-cap stocks and a renewed interest in riskier assets like cryptocurrencies, with Bitcoin seeing a significant rebound. The Treasury bond market is also experiencing a shift, as traders anticipate more monetary easing despite stable inflation data, potentially leading to a steepening of the yield curve.
The iShares 20+ Year Treasury Bond ETF (TLT), which focuses on long-term U.S. Treasury bonds, is seeing increased demand as investors position themselves for potential policy shifts. The ETF is currently trading at $87.30 as of 14:21 on January 16, up from its last close of $86.76, reflecting a broader market trend towards long-duration assets amid expectations of continued monetary support.