Growth vs Defence - which way to turn?

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AMP Capital expert
Posts: 36
Registered: ‎10-03-2016

Growth vs Defence - which way to turn?

[ Edited ]

I know markets have been performing well since Trump's election, but there is a fundamental basis for the move higher.  Here is a chart from our proprietary indicator set curated by our Global Fixed Income team.  The chart shows that this indicator has spiked to a 6 year high in early 2017.  There are a number of areas of strength at the moment including:

1. ESI - our economic surprise indices are strongly positive - the data is coming out much better than analysts expect;

2. macro pulse - this is a range of forward looking indicators of the direction of the global economy, and has been strong now for the last 3 or 4 months;

3. FCI & PCI - financial conditions and policy conditions are still supportive of future growth; and

4. Headline EPI - the drag from below trend economic indicators is fading;

 

It continues to be relevant to consider your growth and defense allocation in today's environment.  Hope that helps - please reach out if you have a question or insight.

global fundamental indicator feb 2017.png
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