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 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 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
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
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
Cyclicals vs. Defensives Performance and U.S. 10-Year Treasury Yield The rise in yields is confirming the relative strength of U.S. cyclical stocks as they respond positively to favorable economic indicators while U.S. defensive stocks face pressure. Image: Morgan Stanley Research