The Fast Money traders think the latest run higher may be all about money mangers chasing performance.
As Joe Terranova has said many times, there’s a lot of money on the sidelines. And after last year’s horrible results, money managers can’t miss a big move to the upside.
Steve Grasso shares his thesis. He adds that smart money is going into ETFs quickly so they can participate in the upside moves and “then they’ll do their homework later,” suggesting at some point their money will move into specific equities.
Money Mngrs. Chasing Performance
Select Sector SPDR Perform. Since Last Monday
Financials ETF 13%
Materials ETF 12%
Energy ETF 10%
Industrials ETF 10%
Consumer Disc. ETF 10%
Technology ETF 9%
Consumer Staples ETF 5%
Utilities ETF 5%
Health Care ETF 4%
What does that mean for the average investor?
Keep an eye on technology and pharma, counsels Grasso. I think you’ll see money continue to flow into these sectors because they have strong balance sheets.