All major market indices are up 11% for the year. At this juncture a consolidation phase is likely in order.
We recommend investors focus on sectors with strongest relative strength: utilities and REITs as defensive sectors; industrials, which could benefit from positive trade talks with China, and consumer discretionary.
Equity sentiment has shifted from excessive pessimism in December to too much optimism in late February.
From a contrary standpoint, thisargues for a short-term pause in the stock market,as equities digest their recent robust gains.