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
Secular Growth Stocks Relative to Defensive Stocks More downside ahead? This chart suggests that secular growth stocks are at risk. Image: Morgan Stanley Research
U.S. Stocks – Cyclicals vs. Defensives Investor sentiment is often mirrored in the performance of cyclical and defensive equities. The anticipation of economic expansion usually prompts a preference for cyclical stocks, causing them to outperform defensive stocks. Image: Goldman Sachs Global Investment Research
Stocks – Cyclicals vs. Defensives In both the U.S. and Europe, cyclicals have seen greater inflows than defensives, reflecting an anticipation of economic growth. This expectation usually favors cyclicals over defensives. Image: Goldman Sachs Global Investment Research
Cyclical to Defensives Stock Ratio and U.S. 10-Year Bond Yield The cyclical/defensives stock ratio points to economic weakness. Image: Morgan Stanley Research
Stocks – Global Cyclical Relative to Defensive Sectors vs. U.S. 10-Year Yields Is now the time for defensive stocks? Image: Longview Economics
Cyclical Stocks – World Cyclicals vs. Defensives Around Bear Markets Cyclicals have recovered vs. defensives, in line with the average recovery, but they have lagged the post-GFC recovery. Image: Goldman Sachs Global Investment Research
U.S. 10-Year Treasury Yield vs. Cyclical/Defensives Stock Ratio The recent rise in the cyclical/defensives stock ratio could suggest a rise in 10-year yields. Image: Morgan Stanley Research
10-Year U.S. Treasury Yield vs. Cyclical to Defensives Stock Ratio The divergence between the 10-year U.S. Treasury yield and the cyclical to defensives stock ratio suggests higher yields ahead. Image: Morgan Stanley Research
Performance of U.S. Growth vs. Value Stocks, U.S. vs. non-U.S. Equities and S&P Cyclicals vs. Defensives Equity rotation are delivering for non-U.S. vs. U.S. markets and Cyclicals vs. Defensives, but not for Value vs. Growth. Image: J.P. Morgan