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Kensho Stats

History shows this is how to ride the Trump reflation trade

Donald Trump
Chip Somodevilla | Getty Images
Donald Trump

Everyone on Wall Street (Stanley Druckenmiller, JPMorgan, Goldman Sachs … the list goes on and on) is talking about the possibility of reflation under President Trump if his tax reform, deregulation, fiscal spending and protectionist promises are turned into policy by a Republican-led Congress.

Below is the performance of major assets, sectors and stocks during periods of rising inflation.

You'll see why investors are crowding into copper and selling technology stocks this week, lifting the Dow Jones industrial average to record levels. But they may be missing a trade in consumer staples and other parts of the financial markets, history shows.

Using hedge fund analytics tool Kensho, CNBC PRO looked at all periods when monthly core CPI was up at least 0.5 percent year over year.


Here is the average performance of stocks, bonds and major commodities during those periods of inflation.


Here are the best sectors of the stock market:


Here are the worst sectors:


Here are the Dow winners:


And here are the Dow losers:


Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.