We subscribe to the Bank Credit Analyst as one of our independent research sources. BCA has been doing independent economic and investment research since 1949 and has a sterling reputation. They have just recently published their US Equity Strategy Cyclical Indicator Update.
The update overweights Technology, Healthcare and Energy.
Within technology, because they are looking for stronger captial spending relative to consumer spending, they emphasize Data Processing, Software, Computer Storage, and Communications Equipment. We will be reviewing these sectors for potential investment.
They are particularly enamored of healthcare and within that group, health care equipment. We already have an overweight in healthcare through Pharma, Biotech and general healthcare. We will be reviewing the healthcare equipment sector for potential investment.
BCA is also recommending an overweight in energy which we don't find particularly convincing. We will review the sector for possible upgrade, but for now we don't believe this sector is deserving of special attention.