The global financial markets are like a machine, and each asset class acts as a cog that twists and turns each cycle. Today, there are a few key trends that investors should be aware of before the quarter ends to help them consider the best themes for growing their wealth.

Each step of the machine’s makeup contains actionable steps for investors to follow and rotate some of their capital in and out of respective asset classes. Broader market participants and even Wall Street analysts are aware of these trends, which could start with the Federal Reserve’s potential push to cut interest rates this year.

Because the price of money is typically driven by interest rates, a first sensible step for investors is to figure out where commodities (quoted in U.S. dollars) could be headed and how everything else may follow. For this first step, consider Hess Co. (NYSE: HES). Oil’s new yearly high could have an interesting effect on the iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT).

Kickstarting the Machine: Oil and Bonds

The FedWatch tool at the CME Group Inc. says traders priced in these potential cuts by September 2024. Potentially lower interest rates could lower the value of the dollar index, bringing the price per barrel higher. Reaching a near nine-month high, oil trends may have currently priced in these cuts.

Finding the right oil trade could be treacherous, so here is what Wall Street likes. The integrated oil and gas industry is projected to grow its earnings per share (EPS) by an average rate of 11% this year. In contrast, Hess analysts think Hess could push out 32%.

Knowing that growth will be the main focus in these uncertain times, Mizuho Financial Group Inc. boosted its price target on Hess up to $205 a share, calling for a 30% upside from today’s prices. More than that, The PNC Financial Services Group Inc. bought up to $373,100 worth of Hess stock in the past quarter.

Hess stock trades at 94% of its 52-week high, so momentum has already started for energy stocks. Next in line are bonds, which have attracted few buyers to push their yields down and reflect the potential Fed cuts.

Because of this, the iShares bond ETF trades at roughly $90 a share, a price not seen since 2011. Because bond prices move opposite to yields, investors could catch this ETF at a cyclical low and ride it higher when the Fed throws in the towel and cuts rates.

American Manufacturing is in Play

Because the dollar is set to decline, American exports may become more attractive to foreign buyers. The February ISM manufacturing PMI report recorded export orders at 6.4% higher than the previous month as the sector prepares itself for the coming export activity.

The Japanese steel giant Nippon Steel (OTCMKTS: NISTF), placed a bid in December 2023 to buy out United States Steel Co. (NYSE: X) for $14.9 billion. Now that the Japanese Yen is at a 30-year low against the dollar, buying an American manufacturing firm seems like the cyclical choice.

Another name to remember is Entegris Inc. (NASDAQ: ENTG). This one is looking to grow its EPS by 36% in the next 12 months, riding on the back of the CHIPS and Science Act mission to onshore semiconductor manufacturing in the U.S.

It’s All About the Consumer

Now that U.S. consumer sentiment is at a 3-year high, stocks that enable consumer spending could see a new leg higher. This time, names like Simon Property Group Inc. (NYSE: SPG) afford inflation-beating dividends to sponsor shareholders through this new cycle.

Even after rallying 32% in the past year, Simon Property (a mall owner-operator) still pays a 5.3% dividend yield. Also, its P/E valuation of 20.8x puts it at more than 50% below the real estate investment trust (REIT) industry’s 44.5x multiple.

Over the past quarter, Morgan Stanley and The Goldman Sachs Group Inc. analysts boosted their price targets on the stock. Despite stubborn inflation rates in the U.S., the prospect of potentially lower rates has investors excited about this consumer discretionary play.

The A.I. Race

And who can remember the technology stocks bringing indexes to all-time highs? After carrying the crown for a while, Nvidia Co. (NASDAQ: NVDA) is beginning to raise questions about whether its price is overextended.

After assigning $11 billion to Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), the U.S. government inherently expressed its preference – and confidence – for TSMC to carry out its plan for onshore semiconductor manufacturing.

TSMC is set to grow its EPS by 24% this year, nearly twice the 13% projection for Nvidia. TSMC still trades at a P/E of 28.4x, 68% below Nvidia’s 75.4x valuation.

Over the past 12 months, TSMC stock underperformed Nvidia by as much as 173%, a gap that the favored fundamentals and U.S. backing may fill.