Cyclical stocks have had an impressive comeback since September, outperforming defensive stocks as investors have become increasingly more confident in the global economy. Trade war abatement, improvement in economic data, and higher bond yields have allowed sectors such as financials and industrials and business services to recover, while other more rate‑sensitive sectors such as utilities and real estate have lagged. Global equities outside the U.S., which are more trade‑dependent, have also seen a pickup as progress in trade talks has improved sentiment. Although it is difficult to identify catalysts that can support a sustained rally in cyclicals, a potential Phase I U.S.-China trade deal could boost global risk‑taking
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