MSCI Cyclical and Counter-Cyclical Baskets

October 08, 2013
By Knowledge Leaders Team in Uncategorized

We divide the MSCI World index into cyclical (including materials, industrials, technology and consumer discretionary, financials and energy) and counter-cyclical baskets (including consumer staples, health care, telecom, utilities).  The relative performance of cyclicals vs. counter-cyclicals generally improves when the economic news is improving and contracts when it is deterioratinig.  The relative outperformance of counter-cyclicals is a one week old trend taking place alongside a one month trend in the deterioration of the Citi Economic Surprise index.


The drop in the non-manufacturing ISM last month (right scale inverted) could suggest a continuation of counter-cyclical relative outperformance.


Print Friendly, PDF & Email