Only bonds and the dollar were clear winners: Treasuries continued to rally for as long as six months following a rate cut, according to JPMorgan strategists, while the greenback gained for as long as three months after.

Goldman Sachs strategists expect health care and consumer staples stocks would outperform on lower rates and tech to lag. Factors like momentum and low volatility should also be in favor, they wrote in a note Friday.

“This is going to be a grab for yield that is just going to continue, it may even become more intense,” Rick Rieder, BlackRock chief investment officer for global fixed income, told Bloomberg TV Friday. His firm likes call options to take advantage of an upswing in the S&P 500 and securities unloaded by forced sellers including high-yield bond ETFs.

Tweet Threat
Anastasia Amoroso, global investment strategist at JPMorgan Private Bank in New York, is treading carefully but sees no reason sit out the brewing risk rally.

“People just don’t know which way to turn because we don’t know what the next tweet is going to be,” she told Bloomberg TV. “It’s hard to make a call on this for the next 12 months but I think we can be positioning for a short-term upside here and a reversal in some of the sectors hit the hardest.”

Amoroso likes beaten-up emerging markets, credit and semiconductor stocks.

Thomas Thygesen, head of cross-asset strategy at SEB AB, warns the ebullient mood can quickly shift. If “it turns out in June they say in fact we’re not going to cut rates after all that will leave us with a negative shock still intact.”

Moreover, the underlying problems of weak growth can’t be solved with a quick-fix rate cut, he said.

“If the Fed deals with the trade war shock but they don’t do anything else that still leaves us with the same underlying story as beforehand,” said Thygesen. “And that story was global growth seems to be too weak to support expectations of an earnings rebound in the second half of the year which is what most estimates currently suggest.”

--With assistance from Jonathan Ferro, Alix Steel, David Westin, Justina Lee and Lu Wang.