JP Morgan's latest 'Equity Strategy' focuses on cyclicals vs. defensives - the piece favours cyclical stocks over defensive stocks.
Of course, ForexLive is mainly a forex site, and if FX is your focus I still reckon you'll get something out of this from JPM. I've summarised .. in very, very brief (bolding mine).
- On the negative side, bears are pointing to a rollover in macro momentum, as seen in sequentially weaker ISM/PMIs. We note that this argument was used for the first time almost one year back, as early as last August, and many times in between, but without success.
- To be clear, the activity momentum has peaked, but that development is already behind us and was absorbed by the market. The "new news", in our view, is a likely stabilisation in growth momentum into summer that we expect, rather than an extrapolation of past stalling.
- We believe bond yields have not peaked globally, and certainly not in Eurozone. The pattern of weaker Q1 GDP, followed by stronger 2H, remains, inflation is always a late cycle phenomenon - it is firming, central banks are buying less bonds and the wage pressures are building, given tighter labour markets.
- Put together, the relative upside for Cyclicals is likely less exciting from here given the amazing run, but we continue to maintain a preference for the Cyclicals over Defensives.
