So, now expectations for interest rates have clearly turned, looking at the trend for 10 year US treasury or the rebound of around 15 % for Reits in Australia since the end of October. The rebound of the market is spreading to new sectors, even it is still dominated by IT on 1 year (+ 22 %). During the last 6 months, the market rebound has been driven by new sectors : + 10.5 % for A reits, + 8 % for consumer discretionary and + 7.5 % for financials.
For me, the main question is how far the market is ready to go risk on. Interesting today that ASX small ord increased by 2.7 % vs + 1.7 % for ASX all ord. I don't know if it is just a one off or if this time, we can also expect a rebound for small caps. One of the main problems of small caps has been a lack of liquidity. So I imagine that, if there is a return of liquidity in this part of the market, we could see a sustainable rebound.
