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Equity markets for 2017 and beyond - Which are the sectors for tomorrow?

 

The essential

On both sides of the Atlantic, the excellent 2016 performance of latematuring cyclical sectors and the declining performance of most defensive sectors clearly suggest that we are about to reach a cyclical high.

However, the markers of this cycle – recovery in the price of oil, higher interest rates, Chinese growth – nonetheless appear fairly biased and vigilance is called for as to the sequencing of the next sectoral phases, especially since 2017 could go through two separate phases. For the next few months, barring a major electoral surprise, we will continue to focus on a pro-cyclical allocation in the United States where, paradoxically, the economy is expected to pick up momentum between now and mid-2017. The eurozone, with its lukewarm growth, political uncertainty and growing discontent caused by negative interest rates argues for a relatively diversified allocation. We will be placing the emphasis on earnings, geographical exposure and modified duration. By combining these different criteria, energy, basic materials, IT, food, beverages & tobacco and banks should perform well over the next few months.

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November 2016

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November 2016

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WANE Ibra , Equity Strategy
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Equity markets for 2017 and beyond - Which are the sectors for tomorrow?
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