Style Chart Pack: Counting Red Flags

The second half of the year will be challenging for equity investors because economic growth is clearly deteriorating. Election uncertainty is adding to volatility. Bad news is now bad news, and equity markets will likely pull back, anticipating a hard landing. The GAI trade has run its course and now attracts more scrutiny. Take profits from recent winners. Don’t buy on a dip (at least not yet). Defensive and other laggards offer downside protection and will deliver positive relative returns. Close overweights or even go underweight in the Magnificent Seven sectors.