Executive Summary

  • A Cautious Near-Term Equity Outlook — Plotting our sector and regional equity recommendations on the face of an “investment clock” suggests a cautious near‑term outlook for equities.
  • A Defensive Tilt — There is currently a defensive tilt in both our sector (overweight Health Care, underweight Energy, Materials) and regional (underweight CEEMEA, Latin America) recommendations.  This defensive tilt, which is driven by bottom-up factors, suggests that the biggest gains for equity markets in the current cycle may be behind us.
  • A Useful Rule-of-Thumb — In a complex global economy characterized by asynchronous economic cycles and monetary policies, this stylized model is overly‑simplistic.  However, it is a useful rule-of-thumb in helping determine the relative attractiveness (or unattractiveness) of stocks.

Figure 1: The Cornerstone Capital Global Equity Strategy Investment Clock

Source: Cornerstone Capital Inc.

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.