A wise shopper saw a “going out business” sign in a fortune teller’s window and quipped, “He should have predicted that.” Given the uncertainty surrounding the unconventional leadership of Donald Trump, even a fortune teller may not have much luck predicting next year’s market. Similarly, more than a few investment managers have differing opinions on the future of the market. A financial palm reading is in order.

In the days since Trump’s victory, the stock market has responded positively to his proposed focus on economic growth driven by tax cuts and reduced regulations.

Investors have rotated into macro-themed “reflation” investments, such as industrials and commodities. The broader indices have seen a cyclical rotation into value over growth and small company stocks over large company stocks. In line with the reflation theme, interest rates have risen, consistent with the market’s outlook for improved economic growth. This has caused interest rate-sensitive financial stocks to outperform.

{mosads}Technology has been the biggest loser. Money has come out of technology, a sector in which many investors were overweight, and into investments in cyclicals and financials. American technology companies rely heavily on immigrants, and there is a fear that anti-immigration policies could cause a talent drain.

Within the healthcare sector, the Republican sweep suggests less negative focus on biopharmaceuticals. However, hospitals and other service providers that have benefited under Medicaid expansion will likely be under pressure as the Affordable Care Act is reworked under the new administration.

As we head into the year under a new administration, investment managers fall into two broad camps. There are those who believe in the “Trump rally” and those who are skeptical.

The believers

The believers see Trump’s potential policies, especially on taxes, as bullish. A reduction in the corporate tax rate to 25 percent could increase the earnings of the S&P 500 by 20 percent. Recalling how President Reagan’s pro-growth tax cuts had a positive effect on the economy and the markets, it’s possible that Trump’s tax and regulatory changes could be the catalyst for further gains in the stock market.

Additionally, believers see a Trump presidency as positive for the energy sector, as less regulation and corporate tax reform could help with the onshore shale recovery. The promise of a $300 billion infrastructure bill over three years financed by tax repatriation will benefit many materials and industrials companies.

The skeptics

Other investment managers aren’t so bullish on a Trump presidency. The skeptics think the market’s knee-jerk reaction to the reflation theme and financials is temporary and will eventually dissipate in favor of more rational investing based on long-term fundamentals. Furthermore, the market seems priced for perfection at its current valuation levels, which is causing many to temper their forward expectations.

Trump’s election has the potential to improve economic growth, but his administration’s policy initiatives are unclear. If the new president moves forward with pro-growth policies such as tax reform, reduced regulation and repatriation of foreign capital, the economy and the stock market may continue to trend upward. However, protectionist trade policies and other potentially negative economic initiatives could offset these positives.

The future

As we have learned from Japan’s lost decade, infrastructure spending doesn’t work unless it leads to increased productivity. Building a road where there was previously no road is helpful, but rebuilding an existing road is not as productive. Thus, the increase in infrastructure spending may not be as positive for the economy as many are hoping.

There is little slack in profit margins and increasing interest rates might cause problems for companies that have been fueled by cheap debt. While a more business-friendly administration and some fiscal spending would be positives, these are mostly already baked into next year’s earnings estimates.

The difference between today and the Reagan revolution is that we are starting with low rates and high debt compared to high rates and low debt in the 1980s. We also do not have the luxury of the baby boomers entering their peak consumption years as we did back then.

If we deal the Trump administration’s financial tarot cards for 2017, there are indeed signs of potentially substantial changes for believers and skeptics alike. The one area of agreement among all analysts is that “business as usual” won’t be. No need for a crystal ball. We should have predicted that.

Matthew Lui, CFA, is a research analyst at Canterbury Consulting, a California-based investment firm with more than $17 billion under management for institutions and families.

The views of Contributors are their own and are not the view of The Hill.