US economic growth is set to accelerate with cheaper oil. Federal Reserve rate cuts are likely with inflation cooling. Stock pickers are looking for alternatives to artificial intelligence plays and the American consumer continues to spend. Together it’s a near-perfect recipe for shares in companies that are most closely tied to the economic cycle. Banks like JPMorgan Chase & Co., equipment makers like Caterpillar Inc. and retailers like Gap Inc. and Dollar Tree Inc. are among the companies strategists an ...

Core Viewpoint - Morgan Stanley suggests that despite some negative economic signals, the economy is in an "early cycle" environment with potential for growth ahead [1][3]. Economic Indicators - ADP private payrolls were negative in November, and layoffs are at the highest levels in two decades, indicating some economic stress [1]. - The unemployment rate is rising, but Morgan Stanley believes the worst is already behind us [1]. Earnings Growth - There has been a significant rebound in earnings revisions, with the S&P 500 earnings revisions breadth improving from negative 25% in April to positive 15% [4]. - This rebound is typically seen in early cycle environments, suggesting improving business confidence [4]. Wage Growth and Profit Margins - Wage growth has slowed to a three-month moving average of 4.1% year-over-year, down from 6.7% in July 2022, providing room for profit margins to expand [4]. - Such a decline in wage growth is often observed during recessionary periods [4]. Consumer Demand - Consumer demand is expected to accelerate, as companies are showing higher pricing power, allowing them to increase prices without significantly impacting demand [5]. Federal Reserve Actions - The Federal Reserve is cutting rates to stimulate economic activity, with expectations of two additional cuts in 2026 [6]. - Moderate weakness in the labor market is anticipated to continue, which will support these rate cuts without leading to a recession [6]. Market Outlook - Morgan Stanley forecasts a 14% rise in the S&P 500 to 7,800 by 2026, indicating a bullish outlook for the stock market [7]. Investment Recommendations - The bank recommends an "overweight" position on consumer discretionary stocks, which are expected to perform well during economic recoveries [8]. - This sector includes companies benefiting from consumer spending on non-essentials, such as apparel and hospitality [8].

Core Viewpoint - Morgan Stanley suggests that despite some negative economic signals, the economy is in an "early cycle" environment, indicating potential for growth ahead [1][2]. Economic Indicators - Earnings revisions for the S&P 500 have rebounded from a low of negative 25% in April to around positive 15%, signaling improved business confidence [2]. - Wage growth has slowed to a three-month moving average of 4.1% year-over-year, down from 6.7% in July 2022, providing room for profit margin expansion [2][3]. - Consumer demand is expected to accelerate as companies gain higher pricing power, allowing them to raise prices without significantly affecting demand [3]. Federal Reserve Actions - The Federal Reserve is expected to cut rates, with two cuts anticipated in 2026, aimed at stimulating economic activity [3]. Market Projections - The S&P 500 is projected to rise by 14% in 2026, reaching 7,800 [4]. Investment Recommendations - Morgan Stanley recommends an "overweight" position on consumer discretionary stocks, which are expected to perform well during economic recoveries [5]. - Small-cap stocks are also expected to do well due to their cyclical nature and sensitivity to falling interest rates, with rising earnings growth noted in the Russell 2000 index [6]. - The financial sector is viewed positively, with expectations of improved loan growth benefiting banks [7]. Investment Vehicles - Investors can gain exposure to recommended sectors through ETFs such as the Vanguard Consumer Discretionary ETF (VCR), iShares Russell 2000 ETF (IWM), and iShares U.S. Financials ETF (IYF) [8].

Economic Indicators - The delinquency rate for commercial mortgage-backed securities (CMBS) reached an all-time high of 11.76% in October 2025, increasing almost tenfold since 2023 and surpassing levels seen after the financial crisis [1] - Auto loan delinquencies have also surged, with the Auto Loan 60+ Delinquency Index hitting 6.65% in October, the highest since the Great Recession [9] - The share of U.S. credit card balances in arrears for at least 90 days rose to 12.41% in Q3 2025, the highest since Q1 2011, indicating a concerning trend in consumer credit health [12][13] Market Performance - Despite economic concerns, major stock indexes like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have reached multiple record-closing highs in 2025, suggesting a disconnect between market performance and economic fundamentals [6][7] - The ongoing rate-easing cycle by the Federal Reserve is seen as a catalyst for increased borrowing and potential growth in hiring and M&A activity [4] Economic Outlook - There are indications that the foundation of the U.S. economy is weakening, with Wall Street seemingly ignoring these signs [3] - Historical data suggests that economic cycles are not linear, with recessions being a normal part of the economic landscape, and the average U.S. recession lasting around 10 months [16][17]

Can lower interest rates help the rest of the equity market catch up to big tech. AI has powered most of the rally in the market over the last 6 to9 months. Lower rates could allow the rest of the market to catch up.And that broadening would make for a less concentrated and arguably healthier bull market. Lower interest rates make it easier for consumers, businesses, and other economic participants to borrow money and have easier access to credit. And when credit flows, Americans are more likely to spend mo ...

Market Trends & Industry Dynamics - Private credit industry hasn't been fully tested by the economic cycle [1] - More volatility and a higher default rate in credit markets are expected [1] Investment Opportunities & Potential Risks - Increased volatility and default rates will differentiate strong and weak players in the private credit industry [1]

Sovereign Debt & Economic Cycles - The U S's debt is approaching unsustainable levels, potentially leading to default if conditions remain unchanged [1] - Historical patterns reveal recurring cycles of debt crises, offering valuable lessons for the present [1] - Understanding these cycles is crucial for navigating potential global economic crises [1] Investment & Solutions - Investing in oceans is highlighted as a potential solution or area of focus [1] - The report suggests exploring strategies to address the collective debt burden [1]

Expansion. Peak. Contraction. Trough.The economy moves in cycles—and investors who recognize the signs can adapt before the next shift.Learn more: https://t.co/W3sjN1XH9F https://t.co/E2cNipLjDg ...

Core Viewpoint - The ALPS CoreCommodity Natural Resources ETF (CCNR) has shown strong performance, surging over 28% since the beginning of the year, despite concerns about a potential softening of the U.S. economy [2] Economic Context - The U.S. GDP increased by 3.3% in the second quarter, which may support the materials sector and the investment thesis for CCNR [2] - The performance of the materials sector is expected to continue to align with the fluctuations of the U.S. and global economies, particularly if interest rates continue to decline [3] Geographic Diversification - CCNR allocates nearly two-thirds of its investments to non-U.S. equities, making it more globally focused compared to traditional global equity funds [4] - The ETF has over 14% of its portfolio in Chinese and Japanese stocks, which have seen year-to-date increases of 37.8% and 21.3%, respectively [5] Canadian Market Insights - Canadian stocks, which make up 19.30% of CCNR's portfolio, have performed well, with the MSCI Canada Index rising almost 24% year-to-date [6] - The Canadian government's initiative, Build Canada Homes, aims to stimulate residential construction and could serve as a catalyst for sectors including energy, which constitutes 35.52% of the CCNR portfolio [8]

Core Viewpoint - The foreign exchange market exhibits cyclical patterns driven by economic, policy, seasonal, emotional, and geopolitical factors [11] Group 1: Reasons for Cycles in the Forex Market - Economic cycles directly influence currency strength, with strong economies typically leading to currency appreciation and weak economies to depreciation [2] - Central bank policies, particularly interest rate cycles, are key drivers, with the Federal Reserve's monetary policy often setting the trend for the dollar [2] - Seasonal patterns can cause specific currencies to exhibit regular fluctuations during certain months or quarters [2] - Market sentiment oscillates between greed and fear, impacting the performance of high-risk currencies versus safe-haven currencies [2] - Geopolitical events have their own cycles, affecting related currencies during periods of tension or resolution [2] Group 2: Identifying and Utilizing Forex Cycles - Monitoring central bank policies and economic indicators like GDP and inflation is crucial for understanding macro trends [3] - Technical analysis tools such as moving averages and oscillators can help identify market trends and potential reversal points [4] - Market sentiment can be gauged through the VIX index and CFTC positioning reports, indicating potential shifts in risk appetite [5][6] Group 3: Practical Applications of Cycles - Traders should align their strategies with prevailing cycles, such as capitalizing on the end of a rate hike cycle [7] - Recognizing turning points at the end of cycles can help capture new opportunities as trends shift [8] - Risk management is essential, as cyclical patterns are not foolproof and unexpected events can occur [8] Group 4: Key Reminders for Successful Trading - Cycles serve as a tool rather than a guaranteed method for success, emphasizing the need for continuous learning and system development [16] - Establishing a disciplined approach to trading, including strict adherence to plans and emotional control, is vital for long-term success [10]