Rotation – US vs. non-US Equities, S&P Growth vs. Value, S&P Cyclicals vs. Defensives Is the rotation into value, cyclicals and non-US equities inevitable? Image: J.P. Morgan

Cyclicals to Defensive Stock Ratio and Treasury Bonds Market internals, the preference for large over small and quality over junk, suggest that the recovery will be modest. Image: Morgan Stanley Research

Small Cap Cyclical Sectors vs. Defensive Sectors Median Forward P/E Relative valuations for small-cap cyclicals versus small-cap defensives also remain near the 20-year lows. Image: BofA US Equity & Quant Strategy

U.S. Cyclicals/Defensives vs. ISM Manufacturing PMI Chart showing the large divergence between U.S. cyclicals/defensives and the ISM Manufacturing PMI. Eventually, the gap should close soon. Image: Topdown Charts

Cyclicals vs. Defensives Performance Cyclicals vs. defensives are now two standard deviations from 12M average, as risk-on tone grips stocks. Image: Morgan Stanley Research

U.S. Cyclicals vs. Defensives It’s all about sector rotation: the cyclicals vs. defensives trade is now pricing a growth acceleration. Image: Goldman Sachs Global Investment Research

U.S. 10-Year Treasury Yield and Euro Area Cyclicals Relative to Defensives Chart suggesting that euro area cyclicals outperform defensives, when U.S. bond yields rise. Image: Credit Suisse Research

U.S. Cyclicals vs. Defensives Cyclicals vs. defensives have been a good indicator for monitoring investor sentiment. Image: Goldman Sachs Global Investment Research

S&P 500 Cyclicals Relative to Defensives Chart suggesting that S&P 500 cyclicals could outperform defensives in 2020, based on higher U.S. nominal GDP growth. Image: Stifel

Rallies in World Cyclicals vs. Defensives Since the global financial crisis, average rallies in world cyclicals vs. defensives have lasted only four months. Image: Goldman Sachs Global Investment Research