9. Select non-U.S. equity markets are taking over a leadership position from U.S. stocks. Relative valuations have long been more favorable for international equities, and a broadening economic expansion and revival in global trade could be the necessary catalysts to drive this leadership shift.
10. We also expect leadership changes within U.S. stocks will continue. We expect U.S. stocks to remain range-bound with a bias to the upside. At the same time, improving economic growth and a more hawkish Federal Reserve appear to be causing the financials, industrials and select health care areas to take the leadership baton from utilities and consumer staples. We also believe select areas of the technology sector look attractive.
Bob Doll is chief equity strategist at Nuveen Asset Management.
1 Source: Morningstar Direct, as of 7/7/17
2 Source: Bureau of Labor Statistics
3 Source: Institute for Supply Managemrnt
4 Source: Conerstone Macro Research, 6/29/17
5 Source: BCA Research, 7/3/17
6 Source: Strategas Research, 6/21/17