Cyclicals vs Defensives

While we continue to maintain a defensive over cyclical portfolio structure, yesterday's Weekly Report identified a number of catalysts that could eventually change our view: broad-based and sustained U.S. dollar weakness, particularly against a basket of EM currencies in countries with large…

Economic disappointment will become the key theme in the second half of the year, driving a return to non-cyclical market leadership and a recovery in the growth vs. value ratio.

Despite the broad market's rebound toward the top end of the 18-month long trading range, defensive sectors have held their own against cyclical sectors of late. We expect non-cyclical dominance to reassert itself, regardless of the short-term direction of the overall market. Financial…

This week <i>U.S. Equity Strategy</i> is sending you the latest <i>BCA Special Report</i>, where Mark McClellan and Anastasios Avgeriou tackle the questions of "Global Earnings Recession: How Deep? How Long?"

Cyclical sectors are manufacturing-dependent, whereas defensive sectors are services-oriented, highlighting that cyclicals are more levered to the inventory cycle's ebbs and flows. The latest durable goods report made for grim reading. Both the new orders-to-inventories and shipments-to-…

This week <i>Global Alpha Sector Strategy</i> in conjunction with <i>Emerging Markets Strategy</i> is sending out a <i>Special Report</i> on EM deep cyclical sectors, discussing debt and cash flow dynamics, identifying how far advanced the capital expenditure down cycle is, and determining if recent EM deep cyclical strength should be bought or faded.

Equities are back in overshoot territory. We added the health care sector to our high-conviction overweight list, boosted managed care to overweight and put health care equipment on downgrade alert. Buy cable stocks.

While recent financial stress relief has triggered a short covering rally in deep cyclical sectors, this will only be sustainable if macro forces shift in support of profit outperformance. However, our cyclical vs. defensive macro drivers have not yet confirmed the glimmers of light offered by…

Renewed strength in the U.S. equity market sponsored by another round of global monetary easing has revived the debate about whether it is finally time to transition out of our alpha-generating defensive portfolio strategy. A number of strategists and media outlets have championed the view that…

Renewed strength in the U.S. equity market sponsored by another round of global monetary easing has revived the debate about whether it is finally time to transition out of our <i>alpha</i>-generating defensive portfolio strategy. This <i>Special Report</i> examines the critical factors shaping this investment decision.