Later Cycle Stocks

Yesterday, the Federal Reserve ever so slightly changed their language and made a very small step towards tightening. This morning the PPI came out hotter than expected. I believe this signals we are no longer early in the cycle. When we do get a bounce it is most likely the stocks that have been beat up the most that will bounce hardest. However, looking out longer term it might be time to switch to later cycle stocks. The winners for the past few years will likely not be the winners going forward.

1 comment:

Anonymous said...

there have been also quite a few mid/late-cycle M&A transactions> industrials, materials. These do not happen (voluntarily) at the bottoms and early stages.
Also PE deal size seem to be creeping up; large PE-backed IPOs coming online, too.