- Recent weakness in industrial stocks suggests that the cycle is peaking.
- A combination of a long-term rotation out of tech stocks and a cyclical downturn is likely to result in a crash.
- Capital goods stocks are the core of industrials and they are declining across the board.
- Historically high valuations in the industrial sector also point to low long-term returns.
- Industrials are likely to outperform in the 2020s but it is better to wait until the cycle bottoms and to position defensively in the meantime.
For further details see:
Weakness In Industrials Is A Warning