Key points
- Early cycle: financials, industrials.
- Late cycle: energy, materials.
- Defensive: utilities, consumer staples.
Example
Defensive sectors such as utilities and consumer staples have tended to hold up better once business surveys (PMIs) fall below 50 and a slowdown looks likely.
In history
Post-COVID recovery (2020–2021) saw reopening trades favor industrials and financials, while 2022 defensive rotation lifted utilities and staples.
Related terms