Economics & Strategy – Portfolio Strategy: First

Rejoining the first team after a year in second place is François Trahan; the Wolfe Trahan & Co. strategist also ranks third in Quantitative Research. “He looks at signals that most others ignore,” according to one client. Signs prompt Trahan, 43, to declare himself “very bullish, because there’s a tremendous amount of stimulus in the system in the U.S., coming in the form of lower inflation. Often people don’t appreciate the role that inflation plays in the business cycle.” With the federal funds rate effectively at zero, “inflation matters more than it ever has,” he adds. ­Trahan predicts that the ­Standard & Poor’s 500 index, which rose 11.8 percent year-to-date through August, will continue to climb, especially as data points — initial jobless claims, regional purchasing managers index reports and the like — improve. Sectors most likely to benefit include financials and technology, he says, whereas counter­cyclicals such as health care, utilities and telecom tend to “lag in a world where economic data is improving.”