The end of the beginning?

Invesco
By July 22, 2021 16:26

The end of the beginning?

Strategic Sector Selector

The resilience of the rally in global equities was tested in the second quarter of 2021 by a resurgence of COVID-19 cases and more hawkish messages by the US Federal Reserve. However, markets continued to grind higher even though sector leadership changed and narrowed somewhat. We think the economic recovery remains on track and central banks will be able to start gradually removing support in the next 12 months. However, the transition from the early-cycle snapback to a more settled mid-cycle phase may pass through a more volatile phase. Therefore, we reduce our exposure to early cyclicals by downgrading retailers and travel & leisure to Underweight on concerns about slowing consumer spending growth. We also downgrade financial services and insurance to Underweight to reflect our view of less potential upside in asset markets within our forecast horizon. Finally, we tactically increase our model allocation to defensives by raising healthcare to Overweight and personal care to Neutral.

Invesco
By July 22, 2021 16:26

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