Style Chart Pack: An Ace Up An Economy's Sleeve

Recent data releases and revisions indicate that the US economy is stronger than initially reported, reducing the odds of a recession. While we harbor concerns about the reliability of the data, for now, it appears that aggressive monetary easing is taking place against the backdrop of a strong economy. If that is indeed the case, the economy may overheat again. This warrants portfolio rebalancing away from sectors that offer downside protection in a downturn, such as Telecom and Utilities, to sectors that outperform in a no-landing scenario, such as Energy.