European investors executed a dramatic sector rotation Thursday, fleeing cyclical stocks for defensive havens as Trump’s tariffs reignited trade war fears. The moves created stark divergences:
Winners (Defensives):
- Utilities: +1.3%
- Healthcare: +0.7%
- Consumer Staples: +0.4%
Losers (Cyclicals):
- Autos: -4.2%
- Industrials: -3.1%
- Tech: -2.8%
“Investors are pricing in reduced global trade volumes and higher input costs,” explained a JPMorgan strategist, noting similar patterns to 2018’s trade war but with more severe positioning.
