Sept 17 (Askume) – Global defensive industry funds are in demand from investors as concerns about a slowdown in the U.S. economy force them to seek assets such as consumer staples and utility stocks that can withstand weakness in the labor market and commodities.
From a numerical point of view
According to LSEG Lipper, in the past two weeks, defensive industry funds such as consumer staples and utilities have attracted significant inflows of US$1.43 billion and $1.06 billion, respectively. In contrast, industries such as technology, finance and industry experienced large capital outflows, with total capital outflows of US$2.97 billion, US$1.38 billion and US$540 million, respectively.
Over the past month, the MSCI Consumer Staples Index (.dMIWD0CS00PUS) has gained a notable 3.92%, well above the 1.35% gain of the MSCI World Index (.MIWD00000PUS) .
Why is this important?
This change in trend could diversify market gains as defensive sectors such as consumer staples and health care were previously abandoned in favor of growth sectors such as technology and artificial intelligence.
situation
The US manufacturing PMI showed that factory activity continued to decline in August, while the employment report showed that the labor market cooled down.
Some analysts believe that if the economy is heading into a recession, rate cuts alone may not be enough to offset a drop in corporate profits or market uncertainty.
Key Quotes
Rob Anderson, U.S. industrial strategist at Ned Davis Research, said defensive industries have emerged as market leaders since the beginning of September in response to signs of an economic slowdown.
However, he added: “If stocks rally as post-election uncertainty subsides and seasonal conditions become more favorable, cyclical sectors could dominate again.”
