Cyclical Minus Defensive Sectors Positioning

Cyclical Minus Defensive Sectors Positioning The cyclical-minus-defensive sectors positioning at the 24th percentile indicates a defensive market stance, with investors heavily favoring sectors less sensitive to the economic cycle. Image: Deutsche Bank Asset Allocation

Cyclicals vs. Defensives Performance

Cyclicals vs. Defensives Performance Cyclical sectors’ strong performance suggests economic optimism, but investors must be cautious about potential overvaluation and risks, especially when buying cyclical stocks late in the economic cycle. Image: Goldman Sachs Global Investment Research

Performance – Cyclicals Outperformance

Performance – Cyclicals Outperformance Following the election, U.S. cyclical stocks have significantly outperformed, reflecting investor optimism about the new administration’s pro-growth policies and economic resilience. Image: Morgan Stanley Research

MSCI Cyclicals/Defensives Return

MSCI Cyclicals/Defensives Return During anticipated economic expansions, investors lean towards cyclical stocks for their growth potential, while defensive stocks serve as a buffer during economic downturns. Image: Goldman Sachs Global Investment Research

U.S. Stocks – Cyclicals vs. Defensives

U.S. Stocks – Cyclicals vs. Defensives Investor sentiment is often reflected in the performance of cyclicals versus defensives. Typically, expectations of economic growth lead to a preference for cyclicals, resulting in their outperformance relative to defensives. Image: Goldman Sachs Global Investment Research

Stocks – Cyclicals vs. Defensives

Stocks – Cyclicals vs. Defensives Cyclicals and defensives are useful indicators of investor sentiment. As investors expect economic contractions, they often shift towards defensives, resulting in their outperformance compared to cyclicals. Image: Goldman Sachs Global Investment Research

Hedge Funds’ Cyclical vs. Defensive Positioning

Hedge Funds’ Cyclical vs. Defensive Positioning During economic expansion, investors favor cyclicals over defensives. The current low hedge fund exposure to cyclical vs. defensive sectors may present a potential opportunity for contrarian investors. Image: BofA Global Research