The U.S. debt ceiling has been a source of worry for investors this year, but a potential deal could spur money managers to shift out of the tech and growth stocks that have been havens and into the rest of the market. Megacap tech stocks have been responsible for all of the 8.3% year-to-date gain in the S&P 500 through Wednesday’s close, according to Deutsche Bank research. A deal could mean the market broadens out and outperforms that group, while investors may also look to healthcare stocks as a haven during troubled economic times. President Joe Biden and top U.S. congressional Republican Kevin McCarthy both expressed confidence Wednesday that a deal would be reached, and a survey of global fund managers from BofA Global Research showed that 71% believe a deal to raise the debt ceiling will be reached before the X-date. A resolution could mean the market broadens out and outperforms the tech and growth stocks, while investors may also look to healthcare stocks as a haven during troubled economic times.
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