Executive Summary

  • Regional Strategy — Our regional strategy is unchanged, even with a heightened focus on monetary policies and exchange rates in the past month driven, in part, by fears of deflation.  We continue to have a defensive tilt in our regional recommendations, and are Underweight the commodity-rich regions of CEEMEA and Latin America.
  • Sector Strategy — Our sector strategy is also unchanged and remains “less cyclical, more defensive.”  We maintain our relatively defensive posture given pockets of economic weakness globally.  We are Overweight Health Care in North America, the U.K. and Europe ex U.K.  We are Underweight or Neutral Energy in the majority of regions.
  • Food for Thought — Is deflation always “bad” for equities?  History suggests not.
Geraghty_2Feb15_Fig1-2

For more information about this report, please contact Tanya.Khotin@cornerstonecapinc.com or Alice.Petrofsky@cornerstonecapinc.com.

Please see the attached document for important disclosures.

Michael Geraghty is the Global Markets Strategist at Cornerstone Capital Inc. He has over three decades of experience in the financial services industry including working as an investment strategist at UBS and Citi.