February 8, 2016 - Stocks sold off last week with the market reacting to rising recessionary risks. Our baseline case calls for further economic growth which is supported by the following: the global purchasing manager survey remains close to its average for this expansion; recent developed market (DM) auto and retail sales reports show volumes firming into the new year; DM labor market reports remain upbeat, with unemployment rates falling; and the share of U.S. states expanding rose to 84%, well above the key recession level of 50%. We remain overweight the defensive Health Care, Consumer Staples, and Telecom sectors that have defendable revenue and earnings streams.
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