In our late December year end review, we gave the current cyclical upturn the benefit of the doubt. We were looking for the following positive developments to confirm this stance:
- On the sectors front, early cycle movers really needed to reinstate their uptrend on a relative strength basis.
- Internationally, non-US markets needed to show some pick-up (the world needed other successes next to the US).
- Cross asset, equities needed to outperform Long dated treasuries again.
See for reference the “Wrap-up conclusion” of our year end review: