Current Mkt Thoughts: The worm is Turning

Over the last month or so there has been a reweight into defensive’s and a divergence between domestic reopening plays and international.

I think there will be a period of time in the middle of the year where everything consolidates. When the rate of change data starts rolling over a bit. This could be what is happening now, pricing in peak growth.

I feel this is premature and worm is turning in Europe. Finally getting the vaccination programme going and cases coming down. Think that’s what the EUR is telling you.

I believe RoW starts catching up with the US now, USD falls and reflation kicks in again. But there is obviously complete apathy everywhere now. All the strategists telling you to buy defensives, that normally rings the bell.

When we start seeing mega data in Europe its going to be hard to be long defensives. I would be using the current opportunity to add to your favourite cyclical and value names.