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Utilities and the sector rotation

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Political uncertainty in Europe has furthered a rotation into Defensive sectors and presents a headwind for Cyclical/Defensive sector performance in the near-term. However, the broad macroeconomic and market backdrop is still supportive of Cyclical sectors. The Utilities sector looks excessively cheap, explained by the long-term outlook for earnings growth, though there is not enough evidence to overweight the sector yet.

Ned Davis Research | Equities | Europe Focus | Monthly

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